Global defence market will jump to $69 billion in 2016; France
revives defence industry and will overtake Russia in 2018 for
number two exporter position
Global defence trade reached a record-breaking $65 billion in
2015, according to the annual Global Defence Trade Report released
today by IHS Inc. (NYSE:IHS), the leading global source of critical
information and insight. The report examines trends in the global
defence market across 65 countries and is based upon 40,000
programmes from the IHS Aerospace, Defence & Security’s Markets
Forecast database.
“The global defence trade market has never seen an increase as
large as the one we saw between 2014 and 2015,” said Ben Moores,
senior analyst at IHS. “2015 was a record-breaking year.” Markets
rose $6.6 billion, bringing the value of the global defence market
in 2015 to $65 billion. IHS forecasts that the market will increase
further to $69 billion in 2016.
Key findings from the IHS Global Defence Trade Report:
-
The Middle East was the largest importing region, with $21.6
billion in deliveries of defence equipment;
-
Total defence spending accelerated in Asia-Pacific as states
bordering the South China Sea boosted defence spending;
-
France has doubled its backlog of orders from $36 billion in 2014
to $55 billion, meaning that $55 billion worth of defence equipment
has yet to be exported. This increase means that France will
overtake Russia as the second-largest global defence equipment
exporter.
-
Germany moved from fifth- to third- largest exporter and the UK
dropped from fourth to fifth;
-
The largest global exporter, the United States, saw another 10
percent increase in exports over the past year, bringing the total
to $23 billion (35 percent of the global total);
-
South Korea saw exports climb again to $871 million;
-
There was significant change in the top five importing countries,
with Taiwan, China and Indonesia all dropping out of the top five
and Australia, Egypt and South Korea replacing them.
Middle East Importers Top Western Europe and Sub-Saharan
Africa
The largest Middle Eastern importers remain among the largest
globally in 2015. Saudi Arabia and the UAE imported $11.4 billion
(17.5 percent of the global total) worth of defence systems in
2015, up from $8.6 billion in 2014.
“The combined value of Saudi Arabia and the UAE’s defence
imports is more than all of Western Europe’s defence imports
combined,” Moores said. Saudi Arabia’s imports grew from $6 billion
to $9.3 billion; an increase that is three times that of the entire
sub-Saharan Africa market.
“The US, Canada, France and the UK are the main exporters of
defence equipment to the Middle East and beneficiaries of this
spending boom,” Moores said.
The IHS report indicates that US trade flow to the Middle East
has been driven by sales of military aircraft and associated
mission systems.
Canada is the second-largest exporter of defence equipment to
the Middle East with $2.7 billion in sales, moving the UK down the
table to fourth place, just behind France. Germany and Russia each
saw a 25 percent growth in exports to the region of $1.4 and $1.3
billion, respectively.
Russia is likely to increase its trade in the region as
post-sanctions Iran begins to replace its exhausted aviation
assets.
France Set to Overtake Russia to Become the Second Largest
Global Exporter
In 2018, France will move from the third to the second largest
global exporter of defence equipment, pushing Russia down the table
for the first time in decades.
“France has revived its defence industry and had spectacular
back-to-back year of sales,” Moores said. “2014 and 2015 were
France’s best-selling years in decades.” France sold $26 billion of
defence equipment, $8 billion in 2014 and $18 billion in 2015. In
2016, France secured the record-breaking $38.7 billion Australian
submarine order.
This extended run has increased the French 10-year backlog for
defence exports from $36.1 billion to $54 billion in 2016. These
sales have included Rafale multi-role fighter aircraft, submarines
and helicopters. The bulk of the sales went to India, Saudi Arabia,
Australia, Qatar, Egypt and the UAE.
UK and Norway Prop Up Western Europe Imports
The value of military imports throughout Western Europe rose
from $7.9 billion in 2013 to $9.6 billion in 2015. “This notable
climb takes Western European imports back to 2010 levels but not
their 2009 high point of $12 billion,” Moores said.
Nearly all of Western Europe’s military import gains in 2015
have come from Norway, pan-European programmes and the UK. UK
imports nearly doubled as imports of MARS tanker ships from South
Korea and CH-47 helicopters from the United States have
commenced.
South East Asia Imports Accelerate by 71 Percent
Total defence spending accelerated in Asia Pacific as states
bordering the South China Sea boosted their defence spending.
Between 2009 and 2016, defence imports rose 71 percent in the
region.
Dramatic Growth of US Defence Exports
The United States continued to top the export table in 2015
having supplied $22.9 billion worth of goods and equipment compared
with $20.7 billion worth 2014, $18.3 billion in 2013 and $12.9
billion in 2009. This dramatic rate of growth cannot be tied to one
particular factor but, going forwards, the total may exceed $30
billion as deliveries of the F-35 begin to ramp up. This rise could
be derailed by sustained low oil prices because, for the US, the
Middle East is a key region for exports. The United States
delivered $8.8 billion worth of equipment to the Middle East in
2015.
More Information about the IHS Global Defence Trade
Report
The report was created using the IHS Aerospace, Defence &
Security Markets Forecast database, a publicly sourced global
forecasting tool that tracks current and future programs from the
bottom up, looking at deliveries and funds released to industry
rather than budgets. The study covers production, R&D, logistic
support and service revenues where there is an export.
The entire market is covered except for munitions and small
arms; however, anything under 57mm caliber has not been included in
this study. The study only tracked programs with a primarily
military function, removing homeland security and Intelligence
programs. Constant US dollars are used as the study’s base. For
additional information, visit: www.ihs.com/jmf
The Data
Top Defence Importers (in millions
USD)
2015 2016 Saudi
Arabia 9,325
Saudi Arabia
10,056
India 4,331
India 3,953
Australia
2,306
United Arab Emirates 3,085
Egypt 2,268
South Korea
2,503
South Korea 2,181
Iraq 2,283
Iraq
2,141
Australia 2,063
Unknown 2,080
Egypt
2,032
United Arab Emirates 2,075
Taiwan 2,012
United
Kingdom 1,831
Unknown
1,867
Algeria 1,674
Algeria 1,754
Taiwan
1,513
Qatar 1,692
Top Defence Exporters (in millions
USD)
2015 2016
United States 22,961
United
States 24,407
Russian Federation
7,447
Russian Federation
7,682
Germany 4,779
France 6,033
France 4,774
Germany 4,781
United
Kingdom 3,896
United Kingdom
4,380
Canada 3,114
Canada 4,312
Italy 2,140
Israel 3,011
Israel
2,113
Italy 2,488
China 1,736
Spain
1,802
Spain 1,323
China 1,623
South China Sea Imports (in millions
USD)
Importer
2009 2015 Taiwan
517 1,513
China 1,004
1,460
Indonesia 1,061
1,259
Malaysia 789 257
Vietnam 434 1,117
Philippines 115 401
Fastest-growing opportunities over the past year Romania
Angola Lithuania Philippines Austria Estonia Latvia Poland Vietnam
Bangladesh
Top global import opportunities over
the coming decade Saudi Arabia $36bn India
$25bn UAE $14bn Indonesia $13bn
Vietnam $10bn
About IHS Jane’s
(www.janes.com)
IHS Jane’s, part of IHS Inc. (NYSE: IHS), is the leading open
source information provider and conference organiser on defence,
international risk and national security to governments,
militaries, industries and academia around the globe. IHS is the
leading source of insight, analytics and expertise in critical
areas that shape today’s business landscape. IHS has been in
business since 1959 and became a publicly traded company on the New
York Stock Exchange in 2005. Headquartered in Englewood, Colorado,
USA, IHS is committed to sustainable, profitable growth and employs
nearly 9,000 people in 33 countries around the world.
IHS is a registered trademark of IHS Inc. All other company and
product names may be trademarks of their respective owners. © 2016
IHS Inc. All rights reserved.
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IHS Inc.Amanda Russo, +44 208 276
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8021press@ihs.comTwitter: @IHS_news
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