IHS Inc. (NYSE: IHS), the leading global source of critical information
and insight, today released its annual Global Defence Trade Report,
which examines trends in the global defence market across 65 countries
and is based upon 40,000 defence programme deliveries from IHS
Aerospace, Defence & Security's Markets Forecast database.
In 2014, global defence trade increased for the sixth straight year to
$64.4 billion, up from $56.8 billion. "Defence trade rose by a landmark
13.4 percent over the past year," said Ben Moores, senior defence
analyst at IHS Aerospace, Defence & Security. "This record figure has
been driven by unparalleled demand from the emerging economies for
military aircraft and an escalation of regional tensions in the Middle
East and Asia Pacific."
Highlights from the IHS Global Defence Trade Report:
Saudi Arabia topped India to become the largest defence market for US;
The US supplied one-third of all exports and was the main beneficiary
of growth;
Saudi Arabia and UAE imported more than all of Western Europe;
China is now the third largest importer of defence equipment, up from
fifth;
South Korea is the rising star of Asia Pacific exports;
Despite a record 2014, Russian defence exports are set to drop;
Saudi Arabia, Indonesia, Sweden and Nigeria are the UK's top trading
partners.
One out of every seven dollars spent on defence imports will be spent
by Saudi Arabia
In 2014, Saudi Arabia replaced India as the largest importer of defence
equipment worldwide and took the top spot as the number one trading
partner for the US.
"Growth in Saudi Arabia has been dramatic and, based on previous orders,
these numbers are not going to slow down," Moores said.
Already the largest importer of weapons, Saudi Arabian imports increased
by 54 percent between 2013 and 2014 and, based on planned deliveries,
imports will increase by 52 percent to $9.8 billion in 2015. One out of
every seven dollars spent on defence imports in 2015 will be spent by
Saudi Arabia.
$110 billion in opportunities in Middle East
"When we look at the likely export addressable opportunities at a global
level for the defence industry, five of the 10 leading countries are
from the Middle East," Moores said. "The Middle East is the biggest
regional market and there are $110 billion in opportunities in coming
decade."
Saudi Arabia and UAE together imported $8.6 billion in defence systems
in 2014, more than the imports of Western Europe combined. The biggest
beneficiary of the strong Middle Eastern market remains the US, with
$8.4 billion worth of Middle Eastern exports in 2014, compared to $6
billion in 2013.
The second tier of exporters to the Middle East is led by the United
Kingdom with $1.9 billion, the Russian Federation with $1.5 billion,
France with $1.3 billion and Germany with $1 billion.
China and South Korea stand out in Asia Pacific
In 2014, China jumped from the world's fifth to the third largest
defence importer.
"China continues to require military aerospace assistance from Russia
and its total defence procurement budget will continue to rise very
quickly," said Paul Burton, Director of Defence Industry & Budgets at
IHS Aerospace, Defence & Security.
IHS forecasts that fast-emerging exporter South Korea will become a
regional leader in the coming decade. Some $35 billion in new contracts
will come online within the next decade and the South Korean defence
industry is forecast to win $6 billion in new business within East Asia.
South Korea looks set to be the rising star of the Asia Pacific defence
industry.
Russia had record year, but a perfect storm awaits
Russia exported $10 billion in 2014, an increase of 9 percent from 2013.
China was the largest recipient of equipment ($2.3 billion) followed by
India ($1.7 billion), and Venezuela and Vietnam (each $1 billion).
After years of sales growth, Russian industry exports now face
challenging times. A drop off in exports is forecast for 2015 as major
programs draw to a close, a trend that could be accelerated by sanctions.
Furthermore, falls in the oil price are set to have a devastating impact
on some lead Russian clients who are vulnerable to low oil prices, such
as Venezuela and Iran. This problem is compounded as Chinese industry
becomes increasingly less dependent on Russian technology.
The Data
Top Defence Importers
Top Defence Importers
2013
2014
1. India
1. Saudi Arabia
2. Saudi Arabia
2. India
3. UAE
3. China
4. Taiwan
4. UAE
5. China
5. Taiwan
6. Indonesia
6. Australia
7. South Korea
7. South Korea
8. Egypt
8. Indonesia
9. Australia
9. Turkey
10. Singapore
10. Pakistan
Top Defence Exporters
Top Defence Exporters
2013
2014
1. United States
1.United States
2. Russian Federation
2. Russian Federation
3. France
3. France
4. UK
4. UK
5. Germany
5. Germany
6. Israel
6. Italy
7. China
7. Israel
8. Italy
8. China
9. Sweden
9. Spain
10. Canada
10. Canada
Top Company Exporters
Top Company Exporters
2013
2014
1. Boeing
1. Boeing
2. Raytheon
2. Lockheed Martin
3. Lockheed Martin
3. Raytheon
4. Airbus Group
4. Airbus Group
5. UAC
5. UAC
6. BAE Systems
6. Russian Helicopters
7. Thales
7. United Tech Corp
8. United Tech Corp
8. BAE Systems
9. UralvagonZavod
9. Thales
10. Russian Helicopters
10. Finmeccanica
About the Global Defence Trade Report
The report was created using the IHS Aerospace, Defence & Security
Markets Forecast database, a publicly sourced global forecasting tool
that tracks current and future programs from the bottom up, looking at
deliveries and funds released to industry rather than budgets. The study
covers production, R&D, logistic support and service revenues where
there is an export.
The entire market is covered except for munitions and small arms.
Anything under 57mm caliber has not been included in this study. The
study only tracked programs with a primarily military function, removing
homeland security and Intelligence programs. Constant US dollars are
used as the study's base. For additional information visit: www.ihs.com/jmf
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