For the space economy, 2025 was marked by divergent trends. Public budgets were shrinking, while private investment was growing rapidly. Against this background, Europe showed double-digit growth in public spending for the first time in five years.
Germany increases defense spending
European space budgets reached €13.5 billion, which is 12% more than a year earlier. Overall, this is the first double-digit growth seen in the past five years.
The main driver was national defense spending, above all from Germany. For Europe, the focus on its own space systems is turning from an ambition into a condition of strategic independence. This is shown by the ESA Space Economy Report 2026, released on July 13, which summarizes data for 2025. In the United States, a reduction in the defense budget and the absence of growth in NASA’s budget pulled the overall figure downward.
Prime contractors regain market share
The upstream segment, meaning the production of spacecraft and launch services, reached €75 billion. Institutional demand accounts for 80% of this volume, with defense orders now prevailing. European prime contractors managed to regain 10% of the global market. Among countries that open tenders to foreign participants, their share reaches 65%.
In the downstream segment, which covers satellite services and data and is worth about €490 billion, services based on global navigation satellite systems take up the lion’s share. They account for 77% of this volume, while Europe itself generates 19% of global demand for end products and services. Satellite data and signals are becoming increasingly deeply embedded in the wider digital economy, the report’s authors note.
The American investment leap
Private investment in space startups grew by 60% globally. The main beneficiary was the United States, where capital inflow jumped by 177%. European companies raised €1.4 billion over the same period, 8% less than in 2024, although this is still the second-highest annual figure in the history of observations.
Overall, in the first half of 2026, the private space sector worldwide attracted $28.7 billion across 420 deals, and its total valuation reached $1.1 trillion. Six companies closed funding rounds of half a billion dollars or more. The money is going primarily into orbital infrastructure, transportation, and stations, rather than risky research.
The Ukrainian sector
The Ukrainian sector does not appear separately in this statistics. According to expert estimates, Ukraine’s share of the European market for space-technology production does not exceed 1%, despite its official accession in April 2025 to the EU Space Programme under the Copernicus, Space Weather Events, and Near-Earth Objects components.
Ukrainian state enterprises currently do not have direct contracts with ESA. At the same time, European orders are being carried out by companies with Ukrainian roots that are registered abroad. Among them are the British company Skyrora, with projects under CSTS and GSTP, and the American company Firefly Aerospace, which cooperates with ESA on launches from the Esrange Space Center in Sweden.
