Department of International trade publish defence and security export statistics
On Tuesday the Department for International Trade published its annual defence and security export figures for 2017, the fifth year that this data has been released as Official Statistics’. The report estimates that the global defence export market was valued at close to $98Bn USD, the biggest in a decade. UK defence exports were worth £9Bn, up 53% on the 2016 total, giving the UK a market-share estimated at 12%. Using the DIT methodology, this equates to a 3rd placed ranking globally and, importantly for DSO, allows them to maintain that the UK remains second over a rolling ten-year measure (considered to be a more indicative measure given the inconsistent pattern of strategic export sales). Unsurprisingly, the USA retained its position as the preeminent defence exporter with a market share estimated at 53% in 2017. Russia were in 2nd place with an estimated market-share of 16%. The UK leapfrogged France with double the sales of our closest European rival, who also announced its own statistics this week, detailing sales worth €6.7Bn, half the 2016 figure.
Aerospace remained the backbone of UK exports, which accounted for two thirds of all sales globally, but 91% of total UK exports. Notable contributors in 2017 included growth in F-35 sales and exports, for which the UK supplies 15% of the value-added content, the sale of Rolls-Royce engines for Multi Role Tanker Transport (MRTT) aircraft to Germany and future capability components to Turkey. This trend is likely to continue in future years as sales of Typhoon to Qatar and, potentially, a second batch to Saudi Arabia come online. Despite these sales not yet being recorded in the statistics, the Middle East nevertheless continued as the dominant market for UK export,, accounting for 57% of sales on average over 10 years, but 67% in 2017.
In the global security export market, the UK achieved export sales of £4.8Bn in 2017, up 12% from 2016, a global ranking of fourth, the highest it has been, and the highest placed European exporter.
EQUIPMENT SUPPORT EXPENDITURE: Asked for what reasons expenditure on equipment support is falling when major new equipment is being brought into service, Minister for Defence Procurement, Stuart Andrew replied that ‘The Government remains committed to real terms growth of the Equipment Plan by 1% each year and to meeting the NATO guideline to spend 20% of its defence expenditure on major equipment, and associated research and development. We plan to spend £179 billion over the 10 years to 2027 to deliver the cutting edge ships, aircraft, and armoured vehicles our military need now and in the future. This includes increasing spending on Equipment Support from £8.3 billion in 2017-18 to almost £10 billion in 2026-27.’
LAND WARFARE STRATEGY: Asked what plans MOD has to publish a land warfare strategy, Mr Andrew replied that ‘We are committed to investing over £17 billion in the Land environment to provide the Army with a modernised warfighting division that includes the transformational STRIKE capability. This investment will support and provide opportunities for the UK's Land and defence sector. To date only Shipbuilding and Combat Air have been selected for a specific sector strategy, other sectors (such as Land) are kept under review. Further sector specific approaches will need to be informed by thorough analysis of the military capability, prosperity, international, industrial and prosperity benefits and will only be applicable in a very small number of cases.’
UNMANNED TRANSPORT SYSTEMS: Asked what assessment MOD has made of the potential for unmanned transport systems to supply troops on the front line, Defence Minister for the Lords, Earl Howe replied that ‘the Defence Scientific and Technology Laboratory (DSTL) is leading the MOD’s research in this area, working with the US Department of Defense to accelerate and demonstrate the effective use of new robotic and autonomous systems technologies. This includes the 'Last Mile Challenge' innovation initiative which has challenged industry and academia to look at how delivery drones and resupply robots can provide vital reinforcements to frontline troops. The challenge is worth a total of £3.8 million over the next 12 months with prototypes being built for demonstration later this year. Four of the five successful organisations are British-led with a wide range of sub-contractors from small and medium sized enterprises, industry and academia. These capabilities and other emerging military technologies will be tested and evaluated at the Autonomous Warrior, Army Warfighting Exercise in November 2018. The exercise, which involves all three Services, DSTL, the US Army and around 50 industry participants, will test a range of research projects including in surveillance, long-range and precision targeting, enhancing mobility and the re-supply of forces, urban warfare and enhanced situational awareness. The lessons identified will support decision making for future investment in ground-breaking technology and innovation to ensure the Army and British industry remain at the cutting edge of technology and combat tactics.’
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*With Parliament now in recess, NDI’s Weekly Defence Insights will become fortnightly throughout August. The next issue will therefore be out on Friday 17th August.