Positive prospects for Defence industry

Source: IHS (www.ihs.com)

An IHS report shows 13.3% growth for Defence industry between 2013 and 2014.

2014 is highlighted as the year of the largest growth in defence trade deliverables since IHS records began in 2008. Markets expanded by $7.6 billion to $64.4 billion, despite the global defence spending fall registered between 2010 and 2013. The growth came from the continued increase in trade of military aerospace products and from the import rampups made by Saudi Arabia, Australia and China. India surpassed Saudi Arabia last year, but their positions reversed again in 2014. China jumped from the fifth largest importer in 2013 to the third largest in 2014, with $2.6 billion worth of imports.

Total global defence trade ($million)

 

Source: IHS Aerospace, Defence & Security (www.ihs.com/industry/aerospace-defense.html)

The order of the top five top exporters of defence industrial products did not change between 2013 and 2014. Eight of the leading 10 countries managed to increase their exports. Only China and Israel saw their export totals fall. Chinese exports declined in 2014 and they are potentially likely to drop out of the top ten next year.

After dropping to eighth place last year, Italy bounced back to sixth largest exporter with new deliveries of the M-346 jet advanced trainer and the ATR-72 transport turboprop. Sweden dropped out of the top 10 and was replaced by Spain with deliveries of the C-295M and A400M military transport aircraft.

South Korea has continued to ramp up and exported $740 million of defence equipment in 2014. The growth is remarkable, as exports were less than  under $100 million in 2008. The existing backlog projects South Korea to overtake China at the turn of the decade.

Last year the IHS Balance of Trade forecasted that Vietnam, Australia, Mexico and Indonesia would all see significant growth over the present decade. All four states saw significant increases of imports in 2014 and are probably going to see significant imports out till 2020.

This year the IHS Balance of Trade team devised a new analytical tool that looks at un-awarded opportunities over a ten year period and the historical propensity to import defence equipment.

Using this analysis the countries that were to see the fastest relative opportunity growth over the next ten years were Turkey, Algeria, Kuwait, Singapore, Qatar, Brazil, Norway and Poland.

The countries that were identified as falling fastest in terms of un-awarded opportunities are Australia, South Korea, the United Kingdom, China, Taiwan, Israel and Venezuela.