MOSCOW, October 3 (RIA Novosti) - The defense spending of the United States is expected to rise, which may be to the financial benefit of the country's military firms, Wayne Plucker, an aerospace analyst with research firm Frost & Sullivan, has been quoted as saying by The Los Angeles Times.
"There are plenty of reasons to think that defense spending is going to be on the rise again. Defense companies are not being harmed by the current situation, I can tell you that much," Plucker was quoted as saying on Thursday.
US military company Raytheon and its contractors expect an increased profit, as US-led coalition conducts airstrikes against the Islamic State (IS) extremist group in Iraq and Syria.
The Pentagon has signed a deal worth $251 million to purchase the Tomahawk missiles from Raytheon and its contractors. The resupply of European and Arab allies has already cost $1 billion , with more spending expected in the future.
In light of the current situation, shares of major military contractors, such as Raytheon, Lockheed Martin, Northrop Grumman and General Dynamics, have been trading near all-time high level.
Investors expect an increased demand for precision-guided missiles and bombs, surveillance and reconnaissance equipment.
The Islamic State is an extremist group that has been fighting against Syrian government since 2012. In June 2014, the group launched attacks in Iraq, declaring a caliphate on the territories under its control.
The United States has been carrying out airstrikes on IS positions in Iraq since August, prior to the airstrikes against the IS in Syria, authorized by US President Barack Obama last month. The president facilitated the creation of a coalition in September, that includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, as well as Egypt, Iraq, Jordan and Lebanon. Several European nations have also participated in the strikes. The UK conducted the first round of airstrikes on IS positions in Iraq, refraining, however, from military actions in Syria.
