US industrial base is becoming stronger for wartime production, study finds

America's defense industrial base is becoming more prepared to sustain a major war, according to a new study from the Center for Strategic and International Analysis. The report found measurable improvements since November 2025, when Secretary of Defense Pete Hegseth vowed to transform the acquisition system for wartime footing. Notably, roughly 10,000 new firms have entered the defense market in the past two years, and munitions contract obligations have risen 330% since FY 2010. The Pentagon is signing multiyear agreements with munitions producers on a historic scale. However, the study found numerous remaining problems, including long manufacturing lead times, critical munitions and materials stockpile issues, and supply chain security concerns. The Pentagon's 2027 budget request allocated 49% to low-cost munitions (under $600,000 each), rising to 70% by 2031. Federal investment in rare earths has seen production soar from 95 tons in 2022 to 8,900 tons in 2025, though rebuilding domestic manufacturing capacity will take years. Foreign Military Sales have more than tripled from under $20 billion in 2015 to over $80 billion in 2025.