PARIS — Over the next ten years, European defense manufacturers are predicted to see their revenues from European clients increase annually by between 10.5% and 11.5%, driven by the majority of countries aiming to meet NATO’s spending goals for 2035, according to a report by Rothschild & Co. Redburn.

Countries like Germany, which have historically spent less, alongside those situated near perceived threats from Russia, are expected to experience the rapid growth, noted analysts Olivier Brochet and Joe Orchard in their October 2 analysis.

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Diversified groups such as Thales and BAE, not specialized in ammunition and drones, may best withstand the post-conflict pressure, the analysts noted. They also pointed out Rheinmetall’s diversification efforts beyond its core businesses, including deals in missiles, satellites, and naval shipbuilding.