The European Space Agency (ESA) has published its latest Space Economy Report, providing a detailed assessment of the trends, investment patterns and market dynamics shaping the global and European space economy in 2025.
The report is designed to give policymakers, industry leaders and investors a clearer understanding of the current state of Europe’s space sector.
Drawing on data from organisations including the OECD, Eurostat, Eurospace, Novaspace and the European Space Policy Institute (ESPI), it examines public spending, private investment, industrial competitiveness and commercial market activity.
Among the report’s key findings, European public space budgets increased by 12% to €13.5bn in 2025 despite a slight decline in global government investment.
The analysis also highlights continued growth across commercial satellite services, stronger market performance by European manufacturers, and an expanding reliance on space technologies across the wider economy.
European space economy shows resilience
The report places Europe’s performance within a broader global context, showing that governments worldwide invested €119bn in space programmes during 2025.
This represents a modest 3% decrease compared with the previous year, largely reflecting shifts in US defence spending and flat funding for NASA.
Europe, however, moved in the opposite direction. Public investment climbed to €13.5bn, marking the first double-digit annual increase in five years. According to the report, the rise was driven primarily by higher national defence expenditure, with Germany leading much of the growth.
ESA notes that changing geopolitical priorities have accelerated defence-related investment, making security an increasingly important component of national space strategies.
Defence reshapes the upstream market
The report estimates that the global upstream space market, covering spacecraft manufacturing and launch services, is now worth approximately €75bn.
Institutional customers continue to dominate this segment, with defence organisations accounting for around 80% of demand. As governments expand sovereign space capabilities, defence requirements are becoming a major driver of satellite manufacturing and launch activity.
European prime contractors also strengthened their competitive position during 2025. They secured around 10% of the global upstream market while capturing approximately 65% of the markets that remain commercially accessible to European industry.
Commercial satellite services continue expanding
While defence dominates upstream activity, the downstream space economy remains overwhelmingly commercial.
ESA values the downstream market at approximately €490bn, encompassing satellite communications, Earth observation services and Global Navigation Satellite System (GNSS) applications.
GNSS-related services represent the largest segment, accounting for 77% of the downstream market. Europe generates around 19% of global demand for downstream space products and services, reflecting the growing use of satellite-enabled technologies across industries ranging from agriculture and transport to telecommunications and logistics.
The report also highlights how satellite data, positioning services and communications infrastructure have become deeply integrated into the digital economy, supporting both businesses and public services.
Private investment presents a mixed picture
Private capital continued flowing into the global space economy, with worldwide investment increasing by 60% during 2025. Much of that growth was concentrated in the United States, where investment activity rose by 177%.
European companies experienced a different trend. Space ventures across Europe attracted €1.4bn in private funding, representing an 8% decline compared with 2024. Despite the annual drop, this remains the second-highest level of private investment ever recorded for Europe’s space sector.
The figures suggest that while investor confidence remains relatively strong, European companies continue to face tougher funding conditions than some international competitors.
Building Europe’s future in space
ESA concludes that space technologies have become essential infrastructure supporting communications, navigation, environmental monitoring, security and many everyday digital services.
As Europe’s dependence on these capabilities grows, the agency argues that sustained investment, industrial capacity and a highly skilled workforce will be critical to maintaining strategic autonomy and competitiveness.
By working with governments and industry, ESA aims to strengthen Europe’s long-term space economy, ensuring the continent can continue developing independent space capabilities while delivering economic and societal benefits across Europe.
