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United Kingdom defence equipment market: $252 billion expenditure by 2023

Press Release   •   Feb 28, 2013 11:11 GMT

The United Kingdom defence equipment market is one of the largest on the globe. Total expenditure is expected to reach $251.86 billion between 2013 and 2023, providing opportunities to domestic and overseas defence companies. The United Kingdom defence equipment market is expected to register a slight decline between 2013 and 2017, falling by -0.88% due to budget cuts. The defence equipment sector is expected to account for 41.63% of the total defence budget by 2017.

The UK's military spending will be driven primarily by expenditure on counter terrorism activities and peace keeping operations. The level of terrorist activity of extremist groups in the UK increased considerably following the September 2001 terrorist attacks on the US and the international military operations against the Taliban and Al Qaeda in Afghanistan. The risk of terrorist attacks in the UK is high due to the country's role as a close ally of the US. The current threat to the UK from international terrorism is considered to be severe; indeed an increase in terrorist activity has substantiated the presence of terrorist groups in UK.

The UK government has announced a reduction in defense expenditure over the next five years in order to control the country's increasing fiscal deficit. Such reductions will lead to a decline in procurements and are expected to have a negative impact on domestic defense companies. The announcement of defense budget cuts followed the Strategic Defense and Security Review conducted in October 2010 and follows many other countries that have already cut their defense budgets, resulting in a contracted global defense market. MoD is planning to reduce personnel by 33,000 across all three military services, including 5,500 in Royal Navy, 19,500 in Army, and 8,000 in Royal Air Force by 2020. In addition, civilian workforce is being reduced by 32,000 at the same tim.

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