According to National Defense Magazine, military spending is expected to decrease by nearly $500 billion over the next 10 years. This doesn't include the impact of Sequestration, which is an automatic reduction in certain government spending unless lawmakers reach an agreement to change it. Sequestration will lead to $1.2 trillion in spending reductions beginning in January, with half of that coming from the defense budget.
Many small manufacturers serve as subcontractors on defense contracts and sequestration will have a direct and significant impact on their revenues. Approximately 70 percent of defense spending is allocated to these subcontractors or suppliers.
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