Table of Contents
Executive Summary
-
- Market size
-
- Figure 1: UK Defence departmental expenditure limits and defence spending, 2011/12-2015/16
- Figure 2: MoD equipment expenditure, 2012/13-2016/17
- Market trends
- US still dominates global military spending despite China closing the gap
-
- Figure 3: Defence spending 2011 and 2015, World’s top six
- Unmanned aerial vehicles becoming a more dominant sector as the nature of conflict continues to change
- Market factors
- The start of Brexit negotiations early next year could change industry plans
- Military capability affected by poor condition of MoD’s estate
- Industry development
- Lockheed Martin maintains its position as the largest defence company in the world
-
- Figure 4: World top 10 defence companies, by revenue, 2015
- Forecast
- Defence DEL expected to rise to boost military capability in preparation for immediate threats
-
- Figure 5: Forecast UK defence DEL, 2016/17-2020/21
- NATO’s importance likely to grow following the UK’s EU exit
- What we think
Key Insights
-
- How has Brexit already impacted the industry?
- Is the UK adapting to changes and developments in the nature of conflict?
- Following the reduction in fleet size, implemented by the 2010 SDSR, is the UK’s military capability still at a sufficient level?
Introduction
-
- Definitions
- Methodology
- Abbreviations
- Political
-
- Figure 6: Trends in public sector total managed expenditure, 2005/06-2016/17
-
- Figure 7: Trends in public sector total managed expenditure, 2005/06-2016/17*
- Market positioning
UK Economy
-
- Key points
- Overview
-
- Figure 8: UK GDP, 2006-16
-
- Figure 9: UK output, by industry, 2008-16
-
- Figure 10: Quarters after GDP peak, 1979, 1990 and 2008
- Inflation
- Interest rates
- House prices
-
- Figure 11: UK house price changes, 2006-16
- Consumer spending
- Manufacturing
-
- Figure 12: UK manufacturing, 2014-16
- Business investment
-
- Figure 13: UK GFCF 2005-15
- Imports
- Exports
Market Factors
-
- Key points
- Uncertainties surrounding economic growth yet to be realised...
-
- Figure 14: GDP growth rate, Q1 2012-Q3 2016
- Figure 15: GDP growth rate, Q1 2012-Q3 2016
- ... but the start of Brexit negotiations early next year could change industry plans
- Change in US leadership could alter global defence structure and spending patterns
- Military capability affected by the poor condition of MoD’s estate
- Other factors
- The Defence Industrial Policy
- The Defence Growth Partnership
- The Arms Trade Treaty
- Strategic Defence Policy
- 2015 NSS and the SDSR
- Royal Navy
- Army
- Royal Air Force
- Defence Operating Model
- Defence cooperation agreements
Market Size
-
- Key points
- SDSR 2015
- Defence spending rises in 2015/16 following government pledge
-
- Figure 16: The UK defence departmental expenditure limits and defence Spending, 2011/12-2015/16
-
- Figure 17: UK Defence departmental expenditure limits and defence spending, 2011/12-2015/16
- Single-use military equipment forms largest amount of capital expenditure
-
- Figure 18: The UK defence departmental capital expenditure limits, 2012/13-2016/17
-
- Figure 19: The UK defence departmental cash resource expenditure limits, 2012/13-2016/17
-
- Figure 20: UK defence departmental cash resource expenditure limits, 2012/13 and 2016/17
-
- Figure 21: The UK defence annually managed expenditure limits, 2011/12-2015/16
-
- Figure 22: The UK defence annually managed expenditure limits, 2011/12 and 2015/16
- Figure 23: MoD equipment expenditure, 2012/13-2016/17
-
- Figure 24: MoD equipment expenditure, 2012/13-2016/17
- Figure 25: MoD research and development expenditure outturn, 2010/11-2014/15
-
- Figure 26: UK defence expenditure by industry, 2010/11-2014/15
-
- Figure 27: MoD major equipment projects, as at 31 March 2015
- PFI
-
- Figure 28: MoD PFI projects, 2015
- Figure 29: MoD PFI projects, 2015 (continued)
Market Trends
-
- Key points
- North American and Western Europe spending falls, but spending rises in other regions
-
- Figure 30: Defence spending 2011 and 2015
-
- Figure 31: Defence spending 2011 and 2015, World’s top six
- Unmanned aerial vehicles becoming a more dominant sector as the nature of conflict continues to change
- UK remains Europe’s leading defence exporter, despite fall in new business
-
- Figure 32: Identified orders of UK exports of defence aircraft and equipment, 2011-2015
-
- Figure 33: Identified orders of UK exports of defence aircraft and equipment, 2011-15
- Armed Forces equipment and formations trends
- Royal Navy and Royal Auxiliary Vessels
-
- Figure 34: Royal Navy and Royal Auxiliary fleet of the UK Armed Forces, 2016
- Aircraft fleet
-
- Figure 35: Fixed-wing platforms and unmanned aircraft systems of the UK Armed Forces, 2016
-
- Figure 36: Rotary-wing platforms of the UK Armed Forces, 2016
- Militarily-useful British-registered vessels
-
- Figure 37: Number of militarily-useful British-registered vessels (passenger, tanker and dry cargo), 2011-15
-
- Figure 38: Number of militarily-useful British-registered vessels (fishing and specialist), 2011-15
- Land equipment
-
- Figure 39: Land equipment of the UK Armed Forces, 2016
- Conventional Armed Forces in Europe Treaty holdings
-
- Figure 40: Number of tanks and artillery holdings in the UK, Germany, Cyprus and Gibraltar within the scope of the conventional Armed Forces in Europe Treaty, 2007-16
-
- Figure 41: Number of tanks and artillery holdings in the UK, Germany, Cyprus and Gibraltar within the scope of the Conventional Armed Forces in Europe Treaty, 2007, 2010, 2013 and 2016
- Figure 42: Number of armoured combat vehicle holdings in the UK, Germany, Cyprus and Gibraltar within the scope of the Conventional Armed Forces in Europe Treaty, 2007-16
-
- Figure 43: Number of armoured combat vehicle holdings in the UK, Germany, Cyprus and Gibraltar within the scope of the Conventional Armed Forces in Europe Treaty, 2007-16 (continued)
-
- Figure 44: Aircraft holdings in the UK, Germany, Cyprus and Gibraltar within the scope of the Conventional Armed Forces in Europe Treaty, 2007-16
-
- Figure 45: Military holdings in the UK, Germany, Cyprus and Gibraltar within the scope of the Conventional Armed Forces in Europe Treaty, by equipment group, 2012 and 2016
Industry structure
-
- Key points
- Industry development
- Global military spending showing signs of improving
- Lockheed Martin maintains its position as the largest defence company in the world
-
- Figure 46: World top 10 defence companies, by revenue, 2015
-
- Figure 47: World top 10 defence companies, by revenue, 2015
- SDSR has allowed the MoD to push ahead with awarding military equipment contracts
- Exports and the UKTI DSO
- Single Source Regulations Office
- Industry structure
-
- Figure 48: Analysis of the changes in the structure of the weapons and ammunition industry, 2012-16
-
- Figure 49: Analysis of the changes in the structure of the air, spacecraft and related machinery industry, 2012-16
-
- Figure 50: Analysis of the changes in the structure of the ship and floating structures industry, 2012-16
-
- Figure 51: Analysis of the changes in the manufacture of military fighting vehicles industry, 2012-16
- Structure by employment
-
- Figure 52: Analysis of the employment structure of the weapons and ammunition manufacturing industry, 2015 and 2016
-
- Figure 53: Analysis of the employment structure of the air, spacecraft and related machinery industry, 2015 and 2016
-
- Figure 54: Analysis of the employment structure of the shipbuilding and repair industry, 2015 and 2016
-
- Figure 55: Analysis of the employment structure of the manufacture of military fighting vehicles industry, 2015 and 2016
- Structure by turnover
-
- Figure 56: Analysis of the financial structure of the weapons and ammunition manufacturing industry, 2015 and 2016
-
- Figure 57: Analysis of the financial structure of the air, spacecraft and related machinery manufacturing industry, 2015 and 2016
-
- Figure 58: Analysis of the financial structure of the shipbuilding and repair industry, 2015 and 2016
-
- Figure 59: Analysis of the financial structure of the manufacture of military fighting vehicles industry, 2015 and 2016
Company Profiles
AWE Management
-
-
- Figure 60: Financial analysis of AWE Management, 2011-15
- Company strategy
-
BAE Systems
-
-
- Figure 61: Financial analysis of BAE Systems, 2011-15
- Company strategy
- BAE Systems Surface Ships
-
- Figure 62: Financial analysis of BAE Systems’ Surface Ships, 2011-15
- Company strategy
- BAE Systems (Operations)
-
- Figure 63: Financial analysis of BAE Systems (Operations), 2011-15
- Company strategy
-
Cobham
-
-
- Figure 64: Financial analysis of Cobham, 2011-15
- Company strategy
-
General Dynamics UK
-
-
- Figure 65: Financial analysis of General Dynamics UK, 2011-15
- Company strategy
-
Hewlett Packard Enterprise Services UK limited (formerly HP Enterprise Services Defence & Security UK)
-
-
- Figure 66: Financial analysis of Hewlett Packard Enterprise Services UK Limited, 2011-15
- Company strategy
-
Leonardo Helicopters (formerly Finmeccanica Helicopters and AgustaWestland)
-
-
- Figure 67: Financial analysis of Leonardo Helicopters (formerly Finmeccanica Helicopters and AgustaWestland), 2011-15
- Company strategy
-
Lockheed Martin (UK)
-
-
- Figure 68: Financial analysis of Lockheed Martin (UK), 2011-15
- Company strategy
-
NETMA
QinetiQ
-
-
- Figure 69: Financial analysis of QinetiQ, 2012-16
- Company strategy
-
Rolls-Royce
-
-
- Figure 70: Financial analysis of Rolls-Royce, 2011-15
- Company strategy
-
- Figure 71: Profiled companies’ combined turnover, 2011-15
-
Forecast
-
- Key points
- Market size
- Defence DEL expected to rise to boost military capability and successfully face immediate threats
-
- Figure 72: Forecast UK defence DEL, 2016/17-2020/21
-
- Figure 73: Forecast UK defence DEL, 2016/17-2020/21
- Defence Equipment Plan
-
- Figure 74: Post-main gate major equipment projects, 2015
- NATO’s importance likely to grow following the UK’s EU exit
- DE&S strategic objectives revealed for up to 2019
- MoD’s main immediate priorities listed in NAO review
-
- Figure 75: Estimated payment under MoD PFI contracts, based on signed defence deals as of March 2015
- Industry
- The level of market uncertainty leading up to Brexit negotiations, and the exit itself, will impact the wider economy and the defence industry
- Emerging threats driving global spending patterns
- New policy aims to improve SME’s share of MoD procurement spend
- Cyber-security becoming an integral part of defence strategy
Further Sources and Contacts
-
- Trade associations
- Aerospace & Defence Industries Association of Europe
- ADS Group Limited
- British Naval Equipment Association
- Northern Defence Industries (NDI)
- Trade magazines
- Aerospace Engineering/Aerospace & Defence Technology (Monthly)
- Defence Contracts Bulletin
- DefenceEye
- Defence Global
- Defence Helicopter
- Global Defence Technology
- Helicopter International
- IHS Jane’s Defence Weekly
- The Engineer
- Trade exhibitions
- Eurosatory
- Farnborough 2018
- Helitech International 2017
- International Defence Exhibition & Conference 2017
- ITEC 2017
Back to top