Wales aerospace, defence, security and space sectors add £2bn to economy

Wales’ aerospace, defence, security and space industries contributed £2 billion to the Welsh economy in 2025, with their economic value growing by a quarter in five years.

New figures published by trade association ADS show that the sectors’ combined gross value added (GVA) increased by 25% between 2020 and 2025. Turnover grew even faster, rising 46% over the same period to reach £5 billion.

The industries now directly support more than 18,500 jobs across Wales, according to ADS.

Advanced manufacturing and defence have contributed significantly to the Welsh economy. The report comes as the UK seeks to increase investment in strategic industries and substantially raise defence spending.

Welsh aerospace and defence productivity beats UK average

ADS said productivity across aerospace, defence, security and space businesses in Wales is also running ahead of the wider UK economy.

Output per worker reached £105,800 in 2025, 6% above the UK average. Productivity across the four sectors has increased by 22% since 2020.

The latest numbers also indicate substantial growth from the position reported by the Welsh Government last year.

In June 2025, the Welsh Government said the country’s aerospace and defence industries generated more than £3.7 billion in combined turnover, supported 16,000 jobs and contributed approximately £1.5 billion in GVA.

At the time, the government said around 285 companies were manufacturing in the two sectors in Wales.

Defence supports 6,500 jobs in Wales

ADS estimates the Welsh defence industry supports 6,500 jobs and generates £1.3 billion in turnover, an increase of 13% over five years.

The sector has also benefited from £1.1 billion in direct Ministry of Defence spending in Wales.

Further growth could follow as UK defence expenditure increases.

A new Wales Regional Defence and Security Cluster was launched in March 2026 to connect businesses, universities and colleges with opportunities arising from higher defence investment.

The initiative followed the Wales Defence Growth Deal Memorandum of Understanding, under which £50 million was allocated to Wales from a £250 million UK programme designed to support regional defence growth.

The cluster is chaired by representatives from Airbus Defence and Space and Thales, and is supported by the Welsh Government and the Ministry of Defence. It is intended particularly to help smaller Welsh businesses enter defence supply chains and secure a greater share of MoD contracts.

The Welsh Government said in March that Wales was receiving around 3% of total MoD expenditure, with an ambition to increase that share to at least 5%.

Wales targets growth in aerospace, defence and space

Wales already hosts some of the world’s largest aerospace and defence groups.

The Welsh Government said in 2025 that eight of the world’s 11 leading aerospace and defence companies had significant operations in the country, including Airbus, BAE Systems, GE Aerospace, RTX, Rolls-Royce, Safran, General Dynamics and Thales.

Wales is also looking to develop a larger commercial space industry.

Its national space strategy identifies capabilities including satellite manufacturing, earth observation, secure communications, photonics, propulsion testing and potential launch operations.

ADS calls for long-term investment

The latest economic figures were released as industry representatives gathered in Newport for the inaugural Defence Security Resilience Cymru event on 3–4 September.

Jon Gray, ADS Chief of Staff and Managing Director for Nations and Regions, said Wales remained an important part of Britain’s advanced manufacturing industry.

“Wales has long been at the heart of the UK’s advanced manufacturing base and continues to play a vital role in driving growth across our sectors,” Gray said. “Our industries have grown by nearly 50% in the last five years alone, and we look forward to seeing these highly productive sectors grow.”

Gray added that maintaining that momentum would require support from both governments.

“To unlock that growth, both the UK Government and Welsh Government must continue to provide the long-term certainty, investment and support that will enable our industries to continue creating jobs and attracting investment into our industries.”