Defense-related spending decisions reached an annual average of nearly €3.75 billion between mid-2025 and June 2026, compared to €730 million during the 2013-2024 period. A report from BBVA Research indicates that Spain has entered a structural change in its defense policy, accompanied by a significant concentration of contracts among major industrial groups.
The increase in European military spending is already having consequences for the Spanish industry. Since 2025, Spain has accelerated its defense investment decisions to reach levels well above those recorded in the previous decade, a process linked to the deteriorating geopolitical landscape, the war in Ukraine, and commitments made within NATO.
The report A Snapshot of Defense Spending in Spain, produced by BBVA Research, estimates the average annual defense-related spending decisions at around €3.75 billion between mid-2025 and June 2026. The difference is considerable when compared to the approximately €730 million per year recorded, on average, between 2013 and 2024. Thus, the volume has more than quintupled.
The acceleration was particularly intense in 2025. The decisions approved by the Council of Ministers mobilized an average amount of almost €4.75 billion that year, with significant concentration during the second half. BBVA Research interprets this development as part of a comprehensive modernization process of the Armed Forces and believes that the data point towards a structural change in Spain’s defense policy.
From Budget Increase to Industry
Spain met its 2025 target of dedicating 2% of GDP to defense according to NATO’s methodology. Maintaining this level in the coming years will require, as BBVA Research warns, budgetary continuity and sustained effort, thus the current increase in investment should not be viewed solely as a succession of extraordinary programs.
The allocation of new investments also highlights how military needs are changing. Resources are particularly concentrated in weapon systems and ammunition, air capabilities, infrastructure, cyber defense, and research and development. Since 2022, the importance of software and communications in contracting has additionally increased, reflecting the growing technological and digital component of defense systems.
This evolution is also evident in tenders. Until June 2026, the awarded amount stabilized around €200 million per month, below the almost €300 million per month recorded during the second half of 2025, excluding December. Supplies account for approximately 65% of the contracts, compared to 30% for services and 5% for works.
The data thus indicates an increase in resources that directly affects business activity. However, this growth is not evenly distributed among Spanish companies.
The Major Contracts Are Concentrated in Few Companies
BBVA Research highlights the high concentration of contracts as a characteristic of the new cycle. Major industrial groups absorb a significant portion of awarded amounts, especially when analyzing large programs related to weapon systems and military platforms.
The most evident example occurred in December 2025. Indra Sistemas led the contracts, followed by Airbus Helicopters España, Escribano Mechanical & Engineering, and Airbus Defence and Space. Companies with a smaller presence include TAI, Telefónica, Uro Vehículos Especiales, Santa Bárbara Sistemas, Cipherbit, and Epicom.
Approximately 75% of the amount awarded that month was related to weapon systems, helicopters, and planes and was concentrated among a small group of companies, mostly national.
An Industrial Map Concentrated by Regions
The concentration is not only industrial. The BBVA Research analysis identifies Madrid, Albacete, Asturias, and Seville among the main hubs linked to defense contracting.
The territorial distribution does not depend on the location of the public bodies awarding contracts, but rather on the location of industrial capabilities. Design, manufacturing, systems integration, and maintenance explain why certain provinces concentrate a significant portion of the activity.
The resulting map also reflects the specialization of the Spanish industry. National companies have a significant presence in land and maritime segments, while the aerospace sector shows a greater degree of international cooperation due to Spain’s participation in multinational programs such as Eurofighter.
The increase in military spending in Europe is also benefiting Spanish defense exports. Aerospace capabilities account for a significant portion of these sales, with Germany, France, and Italy among the primary destinations within the European Union.
An Industry Facing a Growth Cycle
The data analyzed by BBVA Research indicates that the Spanish defense industry is entering a different stage than that of the previous decade. The change is not solely due to the increase in Spanish budgetary allocations. The need to restore military capabilities and replenish equipment is increasing demand across much of Europe, while the war in Ukraine has accelerated investments that had remained at lower levels for years.
The economic impact will depend on the duration of this cycle and how investment is distributed among major contractors, specialized companies, and supply chains. The concentration identified by BBVA Research shows that a substantial portion of major contracts ends up in a small number of companies, but the growth of programs related to software, communications, cybersecurity, ammunition, and R&D also broadens the technological areas linked to defense.
For regions with companies capable of integrating into these industrial chains, the evolution of military spending may have consequences that extend beyond the ministry’s own budgets. The new cycle of Defense is also becoming a cycle of industrial and technological investment, the distribution of which among companies and territories will be an aspect to monitor in the coming years.
