Defence Online

Defence sector continues contributing significantly to UK economy

Homeland May 10, 2024

The Joint Economic Data Hub (JEDHub) report shows growth in Defence sector employment, recruitment and revenue.

New figures show the growth and success of the UK defence industry, with growth in defence sector jobs and strong investment in research and development.

This new report by the Joint Economic Data Hub (JEDHub) on the defence sector’s contribution to the UK economy comes after the Prime Minister and Defence Secretary announced the biggest rise in defence spending in a generation, and reiterates a 69.9% increase in UK defence exports, increasing from £6.6Bn in 2021 to £11.2Bn in 2022.

The report demonstrates both the contribution of the defence sector to the UK and the important role international trade makes to its success, with over a third of turnover coming from international sources in 2022.

The report shows the defence sector continues to be an attractive employer, with surveyed recruitment growing by 17.8% in 2022. Of the c. 84,000 surveyed defence Full Time Equivalent (FTEs)  employed across the UK, it is estimated that c. 54,000 were supported by defence domestic revenue in 2022 and c. 30,000 jobs by international revenue.

The JEDHub is a collaborative initiative between the UK Defence Solutions Centre (UKDSC) and the Ministry of Defence, supported by other government departments, industry, and academia to improve understanding of the defence sector’s contribution to the UK economy.

This year’s report comprises analysis informed by the survey response of 22 UK defence companies as well as data from other sources including the Office for National Statistics.

The latest JEDHub report provides additional insight into defence Research and Development (R&D) investment, which accounted for 60.5% of R&D activity within surveyed companies in 2022. This equates to an investment of £842M of which industry R&D funded initiatives accounted for £171.2M, an increase on the previous year with £112.4M.

The UK government remains the largest source of R&D funding, accounting for 69.8% since 2020. This demonstrates the importance the Government has placed om developing the future of the defence sector. Earlier this week Prime Minister Rishi Sunak launched a plan to steadily increase defence spending, including research and development, to 2.5% of GDP by the end of the decade – reaching £87Bn a year in 2030.

Chief Executive of ADS, Kevin Craven, said: “Through the collaboration between the Ministry of Defence, UK Defence Solutions Centre and industry, the JEDHub third annual economic report published today shows the significant regional growth of our defence sector.

“This industry is seeing a great increase in both high valued skills and jobs with the median average salary being 33% above the manufacturing average. This shows the defence industry’s essential contribution to the prosperity of the UK.”

At a regional level, the report highlights the Northwest of England as an epicentre for defence employment with 31.5% of the surveyed workforce located there.

The report illustrates an 8% increase in domestic revenue reaching £13.8Bn in 2022. £12.3Bn of this was from sales to the UK MOD, demonstrating an increase of 8.9% from 2021 and underlines the enduring importance of MOD as the largest defence customer to the industry.

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Defence investment JEDHub R&D supply chain

Post written by: Vicky Maggiani

Vicky has worked in media for over 20 years and has a wealth of experience in editing and creating copy for a variety of sectors.