Record-breaking $65B Global Defense Trade in 2015 Fueled by Middle East and Southeast Asia
June 13, 2016 | IHSEstimated reading time: 4 minutes
Global defense trade reached a record-breaking $65 billion in 2015, according to the annual Global Defense Trade Report released today by IHS Inc., the leading global source of critical information and insight. The report examines trends in the global defense market across 65 countries and is based upon 40,000 programmes from the IHS Aerospace, Defense & Security’s Markets Forecast database.
“The global defense 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 defense 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 Defense Trade Report:
- The Middle East was the largest importing region, with $21.6 billion in deliveries of defense equipment;
- Total defense spending accelerated in Asia-Pacific as states bordering the South China Sea boosted defense spending;
- France has doubled its backlog of orders from $36 billion in 2014 to $55 billion, meaning that $55 billion worth of defense equipment has yet to be exported. This increase means that France will overtake Russia as the second-largest global defense 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% 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% of the global total) worth of defense systems in 2015, up from $8.6 billion in 2014.
“The combined value of Saudi Arabia and the UAE’s defense imports is more than all of Western Europe’s defense 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 defense 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 defense 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 defense equipment, pushing Russia down the table for the first time in decades.
“France has revived its defense 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 defense 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 defense 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%
Total defense spending accelerated in Asia Pacific as states bordering the South China Sea boosted their defense spending. Between 2009 and 2016, defense imports rose 71% in the region.
Dramatic Growth of US Defense 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.
Suggested Items
Cicor Records Solid Growth in Q1
04/16/2024 | CicorThe Cicor Group continued to grow in the first three months of the year. Quarterly sales increased by 11.8% to CHF 107.3 million compared to the first quarter of the previous year (Q1/2023: CHF 96.0 million).
TT Electronics Awarded Contract with Kongsberg Defence and Aerospace
04/11/2024 | TT ElectronicsTT Electronics, a leading provider of global manufacturing solutions and engineered technologies, announced today that its Fairford UK business has been awarded a new contract with long-standing customer Kongsberg Defence and Aerospace (Kongsberg) for the production of complex cable harness solutions.
Cicor Successfully Completes Acquisition of TT Electronics IoT Solutions Ltd.
04/03/2024 | CicorThe Cicor Group has successfully completed the acquisition of TT Electronics IoT Solutions Ltd. with three production sites in the UK and China.
Absolute EMS Successfully Recertifies ISO 9001:2015 and AS9100 Standards
03/26/2024 | Absolute EMS, Inc.Absolute EMS, Inc., an award-winning EMS provider of turnkey contract manufacturing services, is proud to announce the successful recertification of its ISO 9001:2015 and AS9100 Rev D SAE International Aerospace Standards.
Arlon EMC Receives IPC-4101 QPL Recertification
03/20/2024 | Arlon Electronic MaterialsArlon Electronic Materials has successfully completed an intensive two-day recertification audit by IPC Validation Services that examined Arlon’s manufacturing processes and testing procedures to assure that they are in conformance to the requirements of IPC-4101E-WAM1, the Specification for Base Materials for Rigid and Multilayer Printed Boards.