Credit: US Air Force/Miranda Moorer

UK arms sales splutter

Rolls-Royce and BAE Systems are among the British firms suffering from falling defence budgets.

by Adam Gale
Last Updated: 29 Jan 2016

In normal circumstances, most people would see a 1.3% decline in global military spending as a good thing. War is bad, right? But arms manufacturers (not to mention millions of Syrian refugees) might have a thing or two to say about that. Sales at the eight British defence firms in the world’s top 100 fell 9.3% between 2013 and 2014 as budgets tightened in the UK and US.

Britain remains the second largest arms producer after the USA, with sales from its biggest firms totalling nearly $38bn (£25.5bn), according to the Stockholm International Peace Research Institute (SIPRI). The researchers excluded China, though, as they felt unable to rely on Chinese figures for some reason...

Beleaguered aeronautical giant Rolls-Royce could probably have done without the shrivelling of western defence contracts, but actually outperformed the national average. Arms sales at the world’s 22nd biggest defence company fell 2.2% to $5.4bn, ahead of potential government-brokered rescuer and third-placed BAE Systems, which had a 4.1% sales drop to $25.7bn.

These figures are for 2014 though, and a lot can change in a year. Sales at BAE, which is overwhelmingly a defence firm, rose 11% in the first half of 2015, while at Rolls-Royce’s Defence Aerospace division (about a quarter of the overall business) they fell 1%.

In either case, the market leaders by far remain the Americans. They have 38 companies in the top 100, including leader Lockheed Martin and L-3 Communications, which sounds like the world’s most heavily armed PR firm. Together, these companies account for 54.4% of the $401bn sales made by the top 100 firms last year. Happy Christmas? Yes. War is over? Nope. 

Find this article useful?

Get more great articles like this in your inbox every lunchtime