ESA released their Report on the Space Economy 2024 in December. This article provides a summary of the key points of the report.
Market Overview
The space economy continues its remarkable expansion in 2024, with institutional space budgets expected to reach €121 billion, representing a 7% growth compared to 2023. Defense expenditures in space are growing faster than civil spending, projected to account for 53% of total public space investment in 2024. The remaining 47% dedicated to civil spending shows a modest evolution of 5% compared to the previous year.
The global launch and manufacturing market reached €53 billion in 2023, though experiencing a 19% decrease compared to 2022. Spacecraft manufacturing dominates this segment, accounting for approximately 80% of the total value, while the launch segment represents 20%. Despite Starlink’s significant influence on launch activities, its vertically integrated structure means it represents a relatively smaller share of the upstream market value – approximately 17% of launch value and 6% of manufacturing value.
Public Investment Trends
Institutional space budgets hit a historic high of €106 billion in 2023, posting an 11% increase over 2022 and maintaining an 8% CAGR over the previous five years. Defense spending emerged as the primary growth driver, showing an 18% increase from 2022 to 2023, while civil space grew by 7%. For the first time since the early 1990s, defense spending exceeded civil space spending in 2023, accounting for just over 50% of total public space budgets worldwide.
The United States remains the largest single space budget holder, though its share of global space budget has gradually decreased from over 75% in 2000 to just above 60% in 2023. China has strengthened its second-place position, growing from an estimated 2% to 12% of global space budget between 2000 and 2023, surpassing Europe’s total space allocation. Europe’s share has remained relatively stable at 11% of the global space budget in 2023.
Private Investment Landscape
Private space investment shows promising signs of resilience in 2024, with several significant deals marking the year. While venture capital continues to be a leading funding source for private space ventures, 2024 has witnessed substantial debt operations. Notable transactions include Shanghai Spacecom Satellite Technology’s $994 million Series A funding, SES’s $3.2 billion financing package for the Intelsat acquisition, and Telesat’s Canadian $2.54 billion loan for the LEO Lightspeed satellite network.
The private investment landscape in 2023 saw a total of €6 billion invested globally, representing a 32% drop from 2022 and a 51% decrease from the historic high of €12 billion in 2021. European space ventures received just below €980 million in 2023, a 14% decrease compared to 2022. Despite this decline, the value still represents remarkable growth compared to the €18 million raised by European space startups in 2014.
Launch Activity and Space Operations
As of Q3-2024, 181 launches have occurred, showing a 14% year-over-year growth from September 2023. The United States accounts for over 60% of launches, with SpaceX operating 64 launches for Starlink satellites. China maintained its position with 46 launches, similar to the previous year. A significant milestone was achieved with the successful launch of Ariane 6 on July 9, 2024, from Europe’s Spaceport in French Guiana.
The total mass launched to orbit in Q3-2024 reached 421 tons, marking a 28% decrease from Q2-2024 and the first quarterly decline since Q3-2021. Despite this temporary setback, the total mass launched for 2024 as of Q3 already exceeds the entire 2023 total. By September 30, 2024, 2,006 satellites had been launched, showing a year-over-year decrease of 12%, though projections suggest the year will end with 3,119 satellites launched, slightly above the 2023 total of 2,940.
Satellite Manufacturing and Orders
The satellite manufacturing sector has experienced significant changes in 2024. As of Q3-2024, 169 satellite manufacturing orders were registered, representing a 58% year-over-year decrease compared to Q3-2023. However, the value of 2024 orders shows an almost 20% growth, reaching €8.3 billion. Defense customers continue to dominate, accounting for 66% of satellite manufacturing orders.
European satellite manufacturers have significantly improved their market position, securing 37% of total order value worldwide by Q3-2024, compared to 11% in Q3-2023. The total value of orders secured by Europe nearly quadrupled, increasing from €756 million in Q3-2023 to €3 billion in Q3-2024.
Workforce and Employment
The space sector continues to be a significant employer, with the European space upstream industry reaching 62,659 Full Time Equivalent (FTE) positions in 2023, representing a 9% increase from 2022. European space startups have shown particularly impressive growth, accounting for more than 8,500 FTEs in 2023, or 14% of total European space employment.
In contrast, US space employment has shown a declining trend, dropping from 383,000 in 2017 to 347,000 in 2022. The US upstream sector, combining space-related Manufacturing and Professional and Business Services, employed approximately 155,000 people in 2022, compared to 57,300 FTEs in the European space upstream industry.
Downstream Market Developments
The global downstream market for space reached €358 billion in 2023, posting a 4% increase compared to 2022. Europe accounts for €82 billion, representing 23% of the total downstream market. Unlike the upstream space market, the majority (>90%) of the downstream market is commercial and therefore accessible to the European industry.
Earth observation services have shown strong growth, with value-added services representing 62% of the total EO downstream value in 2023. Europe maintains its position as the second-largest market for EO data and services, with a 22% market share, behind North America’s 45%.
The satellite communications market continues to evolve, particularly with the emergence of large NGEO constellations addressing universal connectivity demands. Starlink’s success is evident in its growth from 5,000 broadband subscribers in 2020 to more than 2 million in 2023.
Economic Context and Future Outlook
The space sector operates within a challenging global economic environment, with worldwide GDP expected to increase by 3.1% in 2024, showing a slight deceleration compared to 2023’s 3.3%. Europe’s economic recovery lags behind the global average, with GDP growth rates predicted at 0.8% for the Euro Area.
The industry faces several challenges, including increasing geopolitical tensions, trade restrictions, and economic uncertainties. Countries are reassessing their trading relationships with a focus on economic resilience and national sovereignty, leading to growing barriers in international trade and potential fragmentation of the global economy into geo-economic blocs.
Summary
The space economy demonstrates resilience and continued growth despite global economic challenges. While public investment remains strong, particularly in defense-related activities, private investment shows signs of adaptation to new market conditions. The industry continues to evolve with technological advancements and changing market demands, particularly in the downstream sector.
European space activities show promising developments, especially in satellite manufacturing orders and workforce growth. However, the sector faces challenges from increasing global competition and economic uncertainties. The successful launch of Ariane 6 and growing investment in new space technologies indicate positive momentum for future development.
The industry’s future will likely be shaped by the balance between traditional space activities and new commercial opportunities, particularly in downstream applications. The continued growth of satellite constellations, emerging technologies, and increasing defense spending suggest a dynamic and evolving space economy landscape for the years ahead.
