UBS (UBS) projects the global space economy’s total addressable market will hit $1.3 trillion by 2040, driven by falling launch costs, expanding satellite services, and rising defence budgets.
The bank’s analyst report estimates annualised growth of approximately 7%, though the forecast was trimmed by one-third from a $2 trillion scenario to account for anticipated delays and technical hurdles.
Satellite Industry Association data valued the global space economy at $429 billion in 2025, reflecting a 3% increase from the prior year.
Commercial satellites generated $303 billion in 2025, representing 71% of the total space economy, underscoring the sector’s growing commercial dominance.
Ground equipment was the largest single segment at $165.2 billion, followed by satellite services at $105 billion, according to the UBS report.
Consumer applications, including satellite television, radio, and broadband services, accounted for $80.2 billion of total service revenue in the same period.
Launch costs are expected to decline sharply, with the price of placing payloads into low Earth orbit potentially falling below $250 per kilogram by 2040, compared with roughly $1,500 to $2,000 currently.
Cheaper access to orbit should make satellite communications, Earth observation, space logistics, and emerging commercial applications significantly more viable for private operators and governments alike.
National security spending represents another substantial growth driver, with the proposed US Space Force budget rising 30% to $49.6 billion for fiscal 2027, targeting missile warning, satellite protection, secure communications, and navigation systems.
Germany has committed €35 billion to space assets by 2030, and NATO members are also planning to increase broader defence and security expenditure through 2035, adding further momentum to the sector.
Longer-term opportunities identified in the report include private orbital stations, space-based manufacturing, lunar infrastructure, and orbital data centres, though many remain technically unproven and require substantial external funding.
Companies with exposure to these themes include Rocket Lab (RKLB), L3Harris Technologies (LHX), and AST SpaceMobile (ASTS), all of which operate across launch, defence, and satellite communications segments.
UBS noted that most incremental market value is expected to come from recurring space-enabled services rather than from launch activity itself, shifting the investment focus toward downstream applications.
Venture capital activity remains robust despite the risks, with $11.6 billion flowing into 430 space-technology deals during 2026 through early July, already matching the full-year total recorded in 2025.
Investment risks cited in the report include launch failures, project delays, inconsistent cash flow, orbital congestion, and ongoing regulatory uncertainty across multiple jurisdictions.
