Spanish defense and aerospace companies have doubled their consolidated revenue over the past decade, reaching 18.034 billion euros in 2025, according to data published by the Spanish Association of Technological Companies for Defense, Security, Aeronautics, and Space (TEDAE). Driven by the war in Ukraine, renewed high-intensity conflicts in Europe and the Middle East, and a broader European push for military autonomy, the sector grew from 11.840 billion euros in 2016, reported.
Structural Growth Fueled by International Instability
The 12% jump in revenue between 2024 and 2025 represents a structural continuation of growth rather than a temporary spike, according to the TEDAE industrial association. Industry leaders say that hybrid conflicts, cyberattacks, and disrupted supply chains have made global instability the norm. Former Indra CEO José Vicente de los Mozos noted during an earnings presentation in April that the war in the Middle East inherently impacts company results positively, illustrating how defense contractors view ongoing conflicts.
Projections for Increased Military Spending and Economic Impact
The sector defends the response of NATO members to the “jump in military investment” – gran part de la facturació d’aquestes empreses és fruit de la despesa pública dels estats –, with an increase in the defense spending target from 2% to 3.5% of GDP. While the Spanish government has met the baseline 2% commitment made to the Atlantic Alliance, reaching the 3.5% threshold long-term would require an estimated 25 billion euros in additional investment for Spain, based on an annual economic impact report compiled with consultancy PwC. To put that figure in perspective, it amounts to seven times the budget of Spain’s Ministry of Housing or three times the nation’s total public housing budget for 2024. The sector’s broader macroeconomic footprint for 2025 includes an estimated 24.425 billion euro impact on Spanish GDP, the creation of 289,938 direct and indirect jobs, 10.821 billion euros in exports, 2.812 billion euros in R&D&I, and 8.107 billion euros in tax revenue.
Sector Breakdown Across Aeronautics, Defense, and Space
TEDAE categorizes the industry into three core pillars. The aeronautics industry, which includes military aircraft maintenance, led revenue at 12.080 billion euros in 2025, marking a 6.24% increase compared to 2024. The defense and security sector generated 10.877 billion euros, up 16.16% year-over-year. Meanwhile, the space sector, encompassing satellite development, reached 1.416 billion euros, representing a 9.51% increase, reported.
Madrid Accounts for 53% of Total Revenue
Geographically, business activity is heavily concentrated in Madrid, which accounts for 53% of total revenue—equivalent to 9.501 billion euros in 2025. TEDAE attributes this concentration to the “headquarters effect,” as major defense and aerospace firms base their operations in the capital. At the same time, the association notes that industrial activity distributes across other regions, maintaining strong manufacturing and technological hubs in Andalusia, the Basque Country, Castilla-La Mancha, and Galicia. In contrast, Catalonia accounted for 2% of the sector’s revenue—totaling 309 million euros—historically reflecting broader social opposition to the arms industry, though recent rearmament trends have prompted some local firms to reevaluate the market.
