ADS publishes annual defence and security Outlook Reports
The annual ADS Outlook Reports show that the UK’s security sector continues to demonstrate growth, almost doubling in size in the last five years. with 2014 figures showing turnover at £8.5bn, that exports grew to £3.4bn and that the sector directly employs 71,000.
Productivity across the security sector is up 24% over the past five years and more than half of companies anticipate growth of more than 10%.
Around 40% of turnover within the security sector is generated by exports, with Europe, North America and the Middle East cited by firms as growing markets. Companies named Latin America, Africa and the Middle East as the regions they are most likely to focus exports over the next three years.
2014 UK defence sector data
Figures for the defence sector show that productivity has grown by 17% over the past four years compared with just six per cent in the rest of the economy. The past five years have seen the sector grow by 12.5%; turnover rests at £22bn, while exports have generated £8.5bn.
Paul Everitt (right), CEO of ADS Group said: “The defence and security industries are of strategic importance, helping to protect the UK and its citizens and contributing to national prosperity by sustaining high-value long-term jobs.
“Succeeding in increasingly competitive export markets is a priority for industry and Government.
"The work of the Defence Growth Partnership (DGP) and Security and Resilience Growth Partnership is designed to help build stronger relationships with international partners, boost investment in innovation and strengthen UK skills. These all contribute to higher productivity and more competitive offerings for customers at home and around the world."
The defence industry directly employs 146,000 earning an average salary of £37,400, with 32,000 of those jobs in design and engineering. Nearly 70% of defence companies employ apprentices or trainees, with 4,400 apprentices working in the industry.
Approximately half of defence companies surveyed as part of the Outlook Report stated that they expected to see growth of 10% or more in the next 12 months, with 55% of companies identifying exports as a driver of growth. More companies than in the previous year exported to North America, and there are growing export levels in the Middle East and Asia. Minimal supply chain presence in Latin America, the Middle East, Africa and Asia creates opportunity for export growth.
Orders for defence products in the air domain lead at 87%, followed by land at eight per cent and five per cent of export orders in the maritime domain.
Leading products and services exported by UK security companies include those used in situational awareness, followed by system recovery and data cleansing. The industry also provides emergency response support and products and services used to assist humanitarian crises. Meanwhile UK companies continue to build on their reputation for providing major event security gained during the London 2012 Olympic Games.
Both the defence and security industries identified concerns over gaining access to skills, particularly in R&D and engineering. Within defence, a decline in plans for investment in R&D, and production and assembly compared with the previous year reinforces the need for the 2015 Strategic Defence and Security Review to encourage support and investment in these areas.
