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Britain remains a leading defence nation

According to research from International Institute for Strategic Studies (IISS), the UK comes in sixth in the global defence expenditure rankings.

The Conservative Party fresh from its election victory have pledged to exceed the NATO minimum 2% of GDP defence spend, with an increase of 0.5% above inflation for every year of the new Parliament.

The Conservative Party manifesto also pledged to modernise and invest in training and equipping the Armed Forces, including a focus on investment in cyber security and creating a UK Space Command.

In the run-up to the election, the Prime Minister, Boris Johnson, and the other NATO leaders met for talks designed to strengthen the alliance and to ensure it is best placed to deal with future challenges. The meeting highlighted the need to invest in technology to meet emerging threats such as cyber and hybrid attacks, and to protect key infrastructure. It also recognised space as an operational domain.

This investment and expansion into new battle spaces will create significant opportunities for those companies working in the defence industry or looking to break into this lucrative marketplace.

 

Defence in numbers

In recently released figures from the Ministry of Defence, a total of £19.2 billion was spent with UK industry and commerce. This represents an increase of 2% against last year’s expenditure, which had also seen a similar year-on-year rise from 2016/17 to 2017/18.

The 2018/19 expenditure supported an additional 3000 jobs compared to the previous year, which means roughly 1 in every 220 people are working in full-time roles to support defence. Through both expenditure with UK industry and direct employment, the MOD supported over 322,000 jobs, with 306,000 based in the UK.

Whilst its customers include the UK’s Armed Forces and national security agencies, it is not just tanks, submarines, ships and aircraft that make up the Ministry of Defence’s spend. Its procurement activity covers a very wide range of requirements such as facilities management, goods and services, catering, IT, logistics, training and fleet management.

Commenting on these figures, Defence Secretary Ben Wallace said: “Defence continues to provide security and prosperity for the UK as we see billions invested in every corner of the country and the subsequent hundreds of thousands of jobs.

“As we continue to innovate and improve the defence enterprise, it is essential that we recruit and retain the best of British skills and talent to ensure we meet our goals.”

 

Defence exports

According to figures from the Department of International Trade Defence Security Organisation (DIT DSO), the UK won defence orders worth £14 billion in 2018, up on the previous year’s figure of £9 billion. Its share of the global defence export market was estimated at 19% in 2018, with the UK’s largest defence export markets being the Middle East, North America and Europe.

The UK is one of the world’s highest defence exporters, averaging second place in the global rankings on a rolling 10-year basis (2009 to 2018), making it Europe’s leading defence exporter in the period.

The Middle East represents an important region for defence exports for countries across the globe. For the UK, it represents 60% of its total export market and highlights the high levels of defence expenditure made by this region. North America was the second highest region for UK defence exporters, accounting for 18% of total UK defence exports. Europe and the Asia-Pacific were the next most important regional markets for the UK in this period.

 

The UK marketplace awaits

The MOD wants to encourage innovation and attract new and non-traditional suppliers, including SMEs, at all levels of the defence supply chain.

If this interests you, learn more about what the UK defence sector is spending on – and with whom.

Our Spend Analysis tool collates and publishes all UK defence sector and public sector spend data, which means you don’t need to wait for MOD spend reports.

DCI customers can gain access to the latest spend figures from DE&S and the Ministry of Defence as the contracts are awarded – ahead of industry competitors.

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