Middle East Importers Top Western Europe and Sub-Saharan Africa

The largest Middle Eastern importers remain among the largest globally in 2015. Saudi Arabia and the UAE imported $11.4 billion (17.5 percent of the global total) worth of defence systems in 2015, up from $8.6 billion in 2014.

“The combined value of Saudi Arabia and the UAE’s defence imports is more than all of Western Europe’s defence imports combined,” Moores said. Saudi Arabia’s imports grew from $6 billion to $9.3 billion; an increase that is three times that of the entire sub-Saharan Africa market.

“The US, Canada, France and the UK are the main exporters of defence equipment to the Middle East and beneficiaries of this spending boom,” Moores said.

The IHS report indicates that US trade flow to the Middle East has been driven by sales of military aircraft and associated mission systems.

Canada is the second-largest exporter of defence equipment to the Middle East with $2.7 billion in sales, moving the UK down the table to fourth place, just behind France. Germany and Russia each saw a 25 percent growth in exports to the region of $1.4 and $1.3 billion, respectively.

Russia is likely to increase its trade in the region as post-sanctions Iran begins to replace its exhausted aviation assets.

France Set to Overtake Russia to Become the Second Largest Global Exporter

In 2018, France will move from the third to the second largest global exporter of defence equipment, pushing Russia down the table for the first time in decades.

“France has revived its defence industry and had spectacular back-to-back year of sales,” Moores said. “2014 and 2015 were France’s best-selling years in decades.” France sold $26 billion of defence equipment, $8 billion in 2014 and $18 billion in 2015. In 2016, France secured the record-breaking $38.7 billion Australian submarine order.

This extended run has increased the French 10-year backlog for defence exports from $36.1 billion to $54 billion in 2016. These sales have included Rafale multi-role fighter aircraft, submarines and helicopters. The bulk of the sales went to India, Saudi Arabia, Australia, Qatar, Egypt and the UAE.

UK and Norway Prop Up Western Europe Imports

The value of military imports throughout Western Europe rose from $7.9 billion in 2013 to $9.6 billion in 2015. “This notable climb takes Western European imports back to 2010 levels but not their 2009 high point of $12 billion,” Moores said.

Nearly all of Western Europe’s military import gains in 2015 have come from Norway, pan-European programmes and the UK. UK imports nearly doubled as imports of MARS tanker ships from South Korea and CH-47 helicopters from the United States have commenced.

South East Asia Imports Accelerate by 71 Percent

Total defence spending accelerated in Asia Pacific as states bordering the South China Sea boosted their defence spending. Between 2009 and 2016, defence imports rose 71 percent in the region.

Dramatic Growth of US Defence Exports

The United States continued to top the export table in 2015 having supplied $22.9 billion worth of goods and equipment compared with $20.7 billion worth 2014, $18.3 billion in 2013 and $12.9 billion in 2009. This dramatic rate of growth cannot be tied to one particular factor but, going forwards, the total may exceed $30 billion as deliveries of the F-35 begin to ramp up. This rise could be derailed by sustained low oil prices because, for the US, the Middle East is a key region for exports. The United States delivered $8.8 billion worth of equipment to the Middle East in 2015.

More Information about the IHS 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; however, 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

The Data

About IHS Jane’s (www.janes.com)

IHS Jane’s, part of IHS Inc. (NYSE: IHS), is the leading open source information provider and conference organiser on defence, international risk and national security to governments, militaries, industries and academia around the globe. IHS is the leading source of insight, analytics and expertise in critical areas that shape today’s business landscape. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs nearly 9,000 people in 33 countries around the world.

IHS is a registered trademark of IHS Inc. All other company and product names may be trademarks of their respective owners. © 2016 IHS Inc. All rights reserved.