By Rebecca Christie of Dow Jones Newswires

June 18, 2007 – Paris, France – An estimated 776,596 missiles of virtually all types valued at $128.2 billion are expected to be built throughout the world in the 2007-2016 decade, predict Teal Group analysts in their latest missile market production forecast released here today.

Teal analysts released their forecast at the 2007 Paris Air Show, the international aerospace exhibition taking place June 18-24, 2007 at Le Bourget International Airport outside of Paris, France.

"We continue to believe that declines in world defense spending have bottomed out in the past few years so far as missiles are concerned," said Steve Zaloga, lead analyst for Teal Group's World Missiles & UAVs Briefing, the 1,400-page, monthly-updated competitive intelligence service, in which this and seven other missile, UAV and smart munitions market forecasts and over 150 individual missile system reports are published and regularly updated.

"One factor that will tend to dampen the appearance of growth in the out-years of the forecast is the likely shrinking of the US market over the next few years as the Iraq conflict winds down," said Zaloga. "There was a bow-wave of funding after 9/11, much of it war-related, that is likely to decrease in the new term. Since the US is such a large portion of the world market, this impacts the bottom-line."

Market Share Forecasts Continue to Surprise

With this forecast, air-to-surface missiles replace air defense missiles as the largest single missile market with the expected production of 32,705 missiles, valued at $26.6 billion, or 20.7% of the total $128.2 billion world missile market during the 2007-2016 decade. Then, 43,577 air defense missiles valued at $20.7 billion, or 16.2%, now rank second by forecasted value in the same period.

When Teal analysts produced their first world missile market production forecast a decade ago at IDEX 97 near Abu Dhabi in the United Arab Emirates, smart munitions were not much of a factor. Today, Teal analysts report that 406,130 smart munitions (i.e., 301,280 guided bombs and 104,850 smart AT munitions) rank even above air-to-surface missiles with a combined value of $23.1 billion. And unmanned aerial vehicles (UAV's), which 10 years ago comprised on 5,382 forecasted units valued at $2.9 billion, or 12.1%, now rank fourth largest with 27,032 units valued at $15 billion, or 11.7%. Anti-tank missiles now number 226,878 forecasted units valued at $15.6 billion, or 12.2%, followed by 29,725 air-to-air missiles valued at $11.6 billion, or 9.1%. Then, 6,099 surface-to-surface missiles valued at $9.4 billion, or 7.4%. And, finally, 4,450 anti-ship missiles valued at $6 billion, or 4.7%, of the total world missile market are expected to be produced in the 2007-2016 decade.