CSIS Report Finds U.S. Defense Industrial Base Gaining Capacity but Still Short on Resilience

A CSIS report states that America’s defense industrial base is becoming more prepared to sustain a major war. ” The CSIS study found that manufacturing lead times, critical munitions and materials stockpiles, and supply chain security still show the U.S. industrial base has a long way to go to achieve resilience.

Roughly 10,000 new firms entered the U.S. defense market in the past two years. Nontraditional companies received over $120 billion in U.S. defense contract obligations in FY 2025. Munitions contract obligations have risen 330 percent since FY 2010.

The Pentagon’s 2027 budget request allocates 49 percent of munitions funding to low-cost munitions defined as costing less than $600,000 apiece. The share is projected to rise to 70 percent by 2031. U.S.

Rare earth production increased from 95 tons in 2022 to 8,900 tons in 2025. Foreign Military Sales rose from less than $20 billion in 2015 to more than $80 billion in 2025. The Trump administration launched the “America First Arms Transfer Strategy” in February 2026.

A February 2026 White House executive order states that the United States will use foreign purchases and capital to support domestic reindustrialization, expand production capacity, and improve the resilience of the United States defense industrial base.

Jerry McGinn stated that the federal government functions as a monopsony in the defense market: “Government sets the market. Government can regulate the market.