Defence sector worth £22.1bn and fundamental to economy

Posted on 12 Sep 2011 by The Manufacturer

The most recent report from the defence trade organisation ADS confirms the importance of the UK defence industry to the economy.

As the second largest defence sector in the world, second only to the US, the report says the defence sector is increasingly crucial for the UK’s recovery. In the face of cuts outlined by the Strategic Defence and Security Review (SDSR), the sector has been able to continue to secure contracts from both domestic and international markets.

Employing 109675 people, the defence industry posted turnover of £22.1bn in 2010, with export sales of £9.5bn (43% of total sales).

The biggest export market was the ‘rest of the world’ – encompassing every country in the world apart from the US, Europe and the UK. Exports to countries such as the Middle East and India totalled £4.6bn. Defence exports to the US were £2.3bn, while those to Europe came in at £2.6bn.

A|D|S specifically commented on the increasing importance of international markets, in particular countries such as India and Russia. As the West experiences further financial difficulties, India has reported that it has earmarked almost $80 billion for new defence equipment acquisitions in the next five years.

Maintenance accounted for £4.4bn, or 20% of turnover. Spending on research and technology totalled £90m, while spending on research and development came in at £1.66bn. The UK defence industry and its advanced technology represents 10% of our manufacturing base.

George Archer