Future of the UK Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2023

Powered by

All the vital news, analysis, and commentary curated by our industry experts.

"Future of the UK Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2023", published by GlobalData, provides readers with detailed analysis of both historic and forecast defense industry values, factors influencing demand, the challenges faced by industry participants, analysis of industry leading companies, and key news.

This report offers detailed analysis of the UK defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.

In particular, it provides an in-depth analysis of the following –
– The UK defense industry market size and drivers: detailed analysis of the UK defense industry during 2019-2023, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns
– Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country
– Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years
– Market opportunities:list of the top ten defense investment opportunities over the next 5 years
– Competitive landscape and strategic insights: analysis of the competitive landscape of the UK defense industry.

Scope

– The country is ranked seventh globally in terms of military expenditure but has been facing constant budget cuts during the historic period in accordance with the nation’s aim of reducing overall expenditure.

– UK defense expenditure registered a CAGR of -3.67%, declining from US$59.3 billion in 2014 to US$51.1 billion in 2018.

– It is expected that the country will increase its defense budget to US$59.3 billion in 2023, reflecting a CAGR of 3.39% over the forecast period.

Reasons to Buy

– This report will give the user confidence to make the correct business decisions based on a detailed analysis of the UK defense industry market trends for the coming five years

– The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period

– Profiles of the top domestic and foreign defense manufacturers . This will provide the user with a total competitive landscape of the sector

– A deep qualitative analysis of the UK defense industry covering sections including demand drivers, Key Trends , and latest industry contracts.

BAE Systems Plc.
Rolls-Royce Plc.
GKN Aerospace Services
Babcock International Group Plc
Leonardo
Thales UK
General Dynamics UK Ltd
Boeing UK
Lockheed Martin UK Ltd
L-3 Communications Group Plc
Northrop Grumman Corporation
Airbus S.A.S

Table of Contents

Table of Contents

1. Introduction 7

1.1. What is this Report About? 7

1.2. Definitions 7

1.3. Summary Methodology 9

1.4. About GlobalData 10

2. Executive Summary 11

3. Market Attractiveness and Emerging Opportunities 13

3.1. Current Market Scenario 14

3.1.1. Military Fleet Size 14

3.1.2. Procurement Programs 19

3.1.3. Key Drivers and Challenges 21

3.2. Defense Market Size Historical and Forecast 23

3.2.1. The UK’s defense budget (inclusive of Foreign economic aid, R&D Defense and Defense Network-enabled Capability [NEC]) is anticipated to increase at a CAGR of

4.33% 23

3.2.2. The UK’s expenditure on defense functions (exclusive of foreign economic aid, R&D defense and defense NEC) is anticipated to increase at a CAGR of

3.39% over the forecast period 25

3.2.3. Counter-terrorism activities, procurements, and peacekeeping operations are the primary factors driving defense expenditure 27

3.2.4. Defense budget as a percentage of GDP is anticipated to decrease over the forecast period 28

3.3. Analysis of Defense Budget Allocation 30

3.3.1. More than 90% of the UK’s defense budget is allocated for defense capabilities 30

3.3.2. The allocations for peacekeeping operations and foreign military aid are anticipated to cumulatively value US$2.4 billion and US$2.8 billion respectively over the forecast period 32

3.3.3. Expenditure on defense capability is expected to grow at a CAGR of

3.32% over the forecast period 34

3.3.4. The allocation towards capital expenditure will remain constant 36

3.3.5. Capital expenditure is anticipated to record CAGR of

5.19% over the forecast period 38

3.3.6. Per capita defense expenditure to increase over the forecast period 40

3.4. Homeland Security Market Size and Forecast 41

3.4.1. The Homeland Security market in UK is expected to grow at a CAGR of

1.73% over the forecast period 41

3.4.2. Border security and cyber-security will be the key drivers for homeland security 43

3.4.3. The UK is ‘highly affected’ by terrorist activities 44

3.4.4. The UK faces a high risk of terrorist attack 45

3.4.5. The UK faces a substantial threat from terrorist organizations 47

3.5. Benchmarking with Key Global Markets 48

3.5.1. The UK ranks among major Global Defense Markets 48

3.5.2. The UK is expected to be among the top 10 defense spending countries in the world 50

3.5.3. The UK allocates a significant percentage of GDP towards defense 51

3.6. Market Opportunities: Key Trends and Growth Stimulators 52

3.6.1. Top 10 Defense market sectors by value (US$ Million) – Projections over period 2018-2023 52

4. Defense Procurement Market Dynamics 53

4.1. Import Market Dynamics 54

4.1.1. Defense imports are expected to remain consistent with the historic trends 54

4.1.2. The US is the leading arms exporter to UK, a trend expected to continue in the coming years 55

4.1.3. Aircraft, Missiles, and Engines account for more than three-quarters of UK arms imports 56

4.2. Export Market Dynamics 57

4.2.1. UK Defense Exports are anticipated to increase over the historic period 57

4.2.2. Saudi Arabia, Oman, and Indonesia are the main buyers of UK defense exports 58

4.2.3. Aircraft make up the majority of the UK’s defense exports 59

5. Industry Dynamics 60

6. Market Entry Strategy 60

6.1. Market Regulation 60

6.1.1. Offset policy discarded in order to maintain competitiveness of domestic suppliers 60

6.1.2. The UK permits 100% FDI in its defense industry 60

6.1.3. Government initiatives to boost the defense industry 61

6.2. Market Entry Route 61

6.2.1. Budgeting Process 61

6.2.2. Procurement Policy and Process 62

6.2.3. Joint weapons development programs are a viable market entry opportunity 63

6.2.4. Joint ventures open up new market entry strategy choices 64

6.2.5. Forming subsidiaries in the UK and the acquisition of domestic companies provide good market entry opportunities 64

6.2.6. Procurement Policy and Process 64

7. Competitive landscape and Strategic Insights 65

7.1. Competitive landscape Overview 65

8. Business Environment and Country Risk 67

8.1. Economic Performance 67

8.1.1. Gross Domestic Product Per Capita 67

8.1.2. Gross Domestic Product at Current Price US$ 68

8.1.3. Exports of goods and services, current prices 69

8.1.4. Imports of goods and services, current prices 70

8.1.5. Gross National Disposable Income, current prices 71

8.1.6. Local Currency Unit per US$, Period Average 72

8.1.7. Market Capitalization of Listed Companies (US$ Billion) 73

8.1.8. Market Capitalization of Listed Companies (% GDP) 74

8.1.9. Government Cash Surplus/Deficit, as a Percentage of GDP (LCU) 75

8.1.10. Goods Exports as % of GDP 76

8.1.11. Goods Imports as % of GDP 77

8.1.12. Services Imports as a % of GDP 78

8.1.13. Services Exports as a % of GDP 79

8.1.14. Foreign Direct Investment, BoP, Current Values in US$ Billion 80

8.1.15. Net Foreign Direct Investment as a % of GDP 81

8.1.16. Mining, Manufacturing, Utilities Output 82

9. Appendix 83

9.1. About GlobalData 83

9.2. Disclaimer 83

Table

List of Tables

Table 1: The UK Army Strength 14

Table 2: The UK Air Force Strength 16

Table 3: The UK Navy Strength 18

Table 4: The UK- Ongoing Development and Procurement Programs 19

Table 5: The UK- Ongoing Development and Procurement Programs 20

Table 6: UK Defense Budget (GBP Billion & US$ Billion), 2014-2023 23

Table 7: UK Defense Expenditure (GBP Billion & US$ Billion), 2014-2023 25

Table 8: UK Defense Expenditure (GBP Billion & US$ Billion), 2014-2023 28

Table 9: UK Defense Budget Allocation (%), 2014-2023 30

Table 10: UK Peacekeeping Services Budget and Foreign Military Aid (US$ Billion), 2014-2023 32

Table 11: UK Defense Capability Budget (GBP Billion & US$ Billion), 2014-2023 34

Table 12: UK Defense Budget Split between Capital and Revenue Expenditure (%), 2014-2023 36

Table 13: Capital Expenditure (GBP Billion and US$ Billion), 2014-2023 38

Table 14: UK – Per Capita Defense Expenditure (US$), 2014-2023 40

Table 15: UK Homeland Security Expenditure (GBP Billion & US$ Billion), 2014-2023 41

Table 16: Terrorism Index,2018 45

Table 17: Benchmarking with Key Markets – 2014-2018 vs. 2019-2023 48

Table 18: Top 10 UK Defense Market Sectors by Value (US$ Million) – 2018-2023 52

Table 19: The UK Budget Formation Timetable 61

Table 20: UK's Participation in International Defense Development Programs 63

Table 21: Competitive Landscape of the UK Defense Industry 65

Figures

List of Figures

Figure 1: UK Defense Budget (GBP Billion), 2014-2023 24

Figure 2: UK Defense Budget (US$ Billion), 2014-2023 24

Figure 3: UK Defense Expenditure (GBP Billion), 2014-2023 26

Figure 4: UK Defense Expenditure (US$ Billion), 2014-2023 26

Figure 5: UK GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2014-2023 29

Figure 6:UK Defense Expenditure Allocations (%), 2014-2023 31

Figure 7: UK Peacekeeping Services Budget (US$ Billion), 2014-2023 33

Figure 8: UK Foreign Military Aid Budget (US$ Billion), 2014-2023 33

Figure 9: UK Defense Capability Budget (GBP Billion), 2014-2023 35

Figure 10: UK Defense Capability Budget (US$ Billion), 2014-2023 35

Figure 11: UK Defense Budget Split between Capital and Revenue Expenditure (%), 2014-2023 37

Figure 12: Capital Expenditure (GBP Billion), 2014-2023 39

Figure 13: Capital Expenditure (US$ Billion), 2014-2023 39

Figure 14: UK – Per Capita Defense Expenditure (US$), 2014-2023 40

Figure 15: UK Homeland Security Expenditure (GBP Billion), 2014-2023 42

Figure 16: UK Homeland Security Expenditure (US$ Billion), 2014-2023 42

Figure 17: Terrorism Heat Map, 2018 44

Figure 18: Terrorism Index, 2018 47

Figure 19: Benchmarking with Key Markets – 2014-2018 vs. 2019-2023 49

Figure 20: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2018 and 2023 50

Figure 21: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2017 51

Figure 22: UK Defense Imports 2013-2017 54

Figure 23: UK Defense Imports by Country (%), 2013-2017 55

Figure 24: UK Defense Imports by Category (%), 2013-2017 56

Figure 25: UK Defense Exports 2013-2017 57

Figure 26: The UK’s Defense Exports by Country (%), 2013-2017 58

Figure 27: UK Defense Exports by Category (%), 2013-2017 59

Figure 28: UK GDP Per Capita, 2015-2025 67

Figure 29: UK GDP (in US$ Billion) , 2015-2025 68

Figure 30: UK Exports of goods, (LCU Billion), 2005-2014 69

Figure 31: UK Imports of goods and services (LCU Billion), 2005-2014 70

Figure 32: UK Gross National Disposable Income, current prices (US$ Billion), 2005-2012 71

Figure 33: UK GBP per US$, 2015-2024 72

Figure 34: UK Market Capitalization of listed companies (US$ Billion), 2005-2012 73

Figure 35: UK Market Capitalization of listed companies(%GDP), 2005-2012 74

Figure 36: UK Government Cash surplus/deficit (LCU Billion), 2005-2012 75

Figure 37: UK Goods exports as % of GDP, 2005-2014 76

Figure 38: UK Goods imports as % of GDP, 2005-2014 77

Figure 39: UK Services Imports as a % of GDP, 2005-2014 78

Figure 40: UK Services exports as a % of GDP, 2005-2014 79

Figure 41: UK FDI, net (BoP, Current US$ Billion), 2005-2014 80

Figure 42: UK Net FDI as a % of GDP, 2005-2014 81

Figure 43: UK Mining, manufacturing and Utilities Output (US$ Billion), 2005-2014 82

Frequently asked questions

Future of the UK Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2023 thematic reports
Currency USD
$1,250

Can be used by individual purchaser only

$3,750

Can be shared globally by unlimited users within the purchasing corporation e.g. all employees of a single company


Undecided about purchasing this report?

Enquire Before Buying Request a Free Sample

Get in touch to find out about multi-purchase discounts

reportstore@globaldata.com
Tel +44 20 7947 2745

Every customer’s requirement is unique. With over 220,000 construction projects tracked, we can create a tailored dataset for you based on the types of projects you are looking for. Please get in touch with your specific requirements and we can send you a quote.

Sample Report

Future of the UK Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2023 was curated by the best experts in the industry and we are confident about its unique quality. However, we want you to make the most beneficial decision for your business, so we offer free sample pages to help you:

  • Assess the relevance of the report
  • Evaluate the quality of the report
  • Justify the cost

Download your copy of the sample report and make an informed decision about whether the full report will provide you with the insights and information you need.

Below is a sample report to understand what you are buying

See what our customers are saying

“The GlobalData platform is our go-to tool for intelligence services. GlobalData provides an easy way to access comprehensive intelligence data around multiple sectors, which essentially makes it a one-for-all intelligence platform, for tendering and approaching customers.

GlobalData is very customer orientated, with a high degree of personalised services, which benefits everyday use. The highly detailed project intelligence and forecast reports can be utilised across multiple departments and workflow scopes, from operational to strategic level, and often support strategic decisions. GlobalData Analytics and visualisation solutions has contributed positively when preparing management presentations and strategic papers.”

Business Intelligence & Marketing Manager, SAL Heavy Lift

“COVID-19 has caused significant interference to our business and the COVID-19 intelligence from GlobalData has helped us reach better decisions around strategy. These two highlights have helped enormously to understand the projections into the future concerning our business units, we also utilise the project database to source new projects for Liebherr-Werk to use as an additional source to pitch for new business.”

Market Analyst & Management, Liebherr-Werk

Your daily news has saved me a lot of time and keeps me up-to-date with what is happening in the market, I like that you almost always have a link to the source origin. We also use your market data in our Strategic Business Process to support our business decisions. By having everything in one place on the Intelligence Center it has saved me a lot of time versus looking on different sources, the alert function also helps with this.

Head of Key Accounts, Saab AB

Having used several other market research companies, I find that GlobalData manages to provide that ‘difficult-to-get’ market data that others can’t, as well as very diverse and complete consumer surveys.

Marketing Intelligence Manager, Portugal Foods

Our experience with GlobalData has been very good, from the platform itself to the people. I find that the analysts and the account team have a high level of customer focus and responsiveness and therefore I can always rely on. The platform is more holistic than other providers. It is convenient and almost like a one stop shop. The pricing suite is highly competitive and value for our organisation.

I like reports that inform new segments such as the analysis on generation Z, millennials, the impact of COVID 19 to our banking customers and their new channel habits. Secondly the specialist insight on affluent sector significantly increases our understanding about this group of customers. The combination of those give us depth and breadth of the evolving market.

I’m in the business of answering and helping people make decisions so with the intelligence center I can do that, effectively and efficiently. I can share quickly key insights that answer and satisfy our country stakeholders by giving them many quality studies and primary research about competitive landscape beyond the outlook of our bank. It helps me be seen as an advisory partner and that makes a big difference. A big benefit of our subscription is that no one holds the whole data and because it allows so many people, so many different parts of our organisation have access, it enables all teams to have the same level of knowledge and decision support.

Head of Customer Insight and Research, Standard Chartered

“I know that I can always rely on Globaldata’s work when I’m searching for the right consumer and market insights. I use Globaldata insights to understand the changing market & consumer landscape and help create better taste & wellbeing solutions for our customers in food, beverage and healthcare industries.

Globaldata has the right data and the reports are of very high quality compared to your competitors. Globaldata not only has overall market sizes & consumer insights on food & beverages but also provides insights at the ingredient & flavour level. That is key for B2B companies like Givaudan. This way we understand our customers’ business and also gain insight to our unique industry”

Head of Consumer Sensory Insights, Givaudan

GlobalData provides a great range of information and reports on various sectors that is highly relevant, timely, easy to access and utilise.  The reports and data dashboards help engagement with clients; they provide valuable industry and market insights that can enrich client conversations and can help in the shaping of value propositions. Moreover, using GlobalData products has helped increase my knowledge of the finance sector, the players within it, and the general threats and opportunities.

I find the consumer surveys that are carried out to be extremely beneficial and not something I have seen anywhere else. They provided an insightful view of why and which consumers take (or don’t) particular financial products. This can help shape conversations with clients to ensure they make the right strategic decisions for their business.

One of the challenges I have found is that data in the payments space is often piecemeal. With GD all of the data I need is in one place, but it also comes with additional market reports that provide useful extra context and information. Having the ability to set-up alerts on relevant movements in the industry, be it competitors or customers, and have them emailed directly to me, ensures I get early sight of industry activity and don’t have to search for news.

Senior Account Manager, TSYS
Go even deeper with GlobalData Intelligence Center

Every Company Report we produce is powered by the GlobalData Intelligence Center.

Subscribing to our intelligence platform means you can monitor developments at Future of the UK Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2023 in real time.

  • Access a live Future of the UK Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2023 dashboard for 12 months, with up-to-the-minute insights.
  • Fuel your decision making with real-time deal coverage and media activity.
  • Turn insights on financials, deals, products and pipelines into powerful agents of commercial advantage.