By Guy Taylor
The UK defence sector grew by 36 per cent between 2013 and 2023 and raked in £28bn last year as war continued to drive military spending globally.
Some 164,000 jobs were generated by the industry over the last decade at a growth rate of 16 per cent and with an average salary of £39,900, according to the latest defence outlook from industry body ADS Group.
Weapons companies like BAE Systems, Lockheed Martin, Qinetiq and Chemring have all booked record profit and revenue in recent years.
Military spending has shifted to the top of government agenda’s worldwide after Russia invaded Ukraine and conflict emerged in the Middle East.
Chemring chief Michael Ord forecast a decade of rearmament in June as it enjoyed a record six months of new orders on the rise in geopolitical tensions.
Kevin Craven, chief executive of ADS said: “The true value of our defence sector – providing safety, security and prosperity throughout the UK – cannot be quantified.”
The ADS Group represents the UK’s aerospace, defence and space sectors. Its report found the combined value of each industry added £38.2bn in value to the economy in 2023, a growth of 50 per cent in the last 10 years. Turnover grew 40 per cent across all three, reaching a combined £88.4bn in 2023.
The aerospace industry in particular has boomed recently amid resurgent global demand for travel following years of Covid-era lockdowns.
Aerospace operating profit rose 10 per cent to $73bn in 2023, according to PwC, although this was still 9 per cent below the pre-pandemic record set in 2018. Performance has been somewhat hampered by supply chain and workforce issues despite the growth.
Aimie Stone, chief economist at ADS Group said: “The latest figures reflect the continued buoyancy, resilience and economic resolve that our sectors continue to deliver to the UK.
“Despite a global pandemic stalling manufacturing productivity, an ongoing critical skills gap, and demand outstripping capacity, we are still seeing strong long-term growth indicators as we continue through 2024.”
She added: “With average productivity of £89,300 per worker, over 400,000 jobs created and exports worth almost £39bn, the immense value of these sectors for the UK economy is simply undeniable.”
In total, exports from aerospace, defence and space reached £38.7bn in 2023 at a growth rate of 32 per cent over the last 10 years. The industries currently employ 427,500 people directly, up 29 per cent between 2013 and 2023.
