The Department for International Trade’s UK Defence and Security Exports (DIT UKDSE) has published its annual defence and security export figures for 2021, providing a snapshot of the health of the UK defence and security sectors as the world began to emerge from the Covid-19 pandemic last year.
In 2021 the UK won defence orders worth £5.5 billion and made £8.22 billion of security export sales. On a rolling 10-year basis the UK remains the world’s second largest global defence exporter and continues to rank in third place for yearly security export sales. As in 2020, the UK’s largest export markets for defence were Europe, North America, and the Middle East; for security the largest markets remained Europe, North America, and the Asia-Pacific, with Europe continuing to account for around half of all sales.
Due to the lumpy and unpredictable nature of the global defence market the UK did see a drop in defence orders compared to 2020, which had reached £7.52 billion. Illustrating how this market significantly fluctuates year-to-year, the global defence export market decreased from $173 billion in 2020 to $127 billion in 2021. From a security sector perspective, sales continued to grow year-on-year, increasing from £7.95 billion in 2020 and £7.2 billion in 2019.
On a sector basis the main defence export market remained aerospace, accounting for 73% of all UK orders, reflecting the UK’s competitive offering in this high-value sector. Previous trends also continued in the security sector, with cyber exports continuing to account for most sales (£5 billion out of the £8.22 billion in 2021). The shift between physical and cyber security is partly reflective of the ongoing impacts of the pandemic on the aviation security market.
As we enter 2023 it will be important to see how the global defence export market has been impacted by the war in Ukraine. There are also likely to be major developments in sixth-generation fighter programmes. Moreover, major announcements made in 2022 about UK naval orders for key partners such as Poland will impact on the future pipeline. Finally, the ongoing growth in demand for cyber security is also likely to be accompanied by a resurgence in the aviation security market.
