Apr. 27, 2012 - 07:48AM | By ANDREW CHUTER
LONDON — British defense exports declined last year, but the fall was compensated for by an increase in overseas procurement of security equipment, the government department responsible for supporting the sales effort said.
Together defense and security sector exports totaled 8 billion pounds ($12.9 billion) in 2011, the Defence and Security Organisation said in an announcement.
The figures show that defense sales in 2011 were down by 400 million pounds to 5.4 billion pounds. The results mark the second year in a row defense exports have fallen after a spike in 2009 when they topped 7 billion pounds.
No market breakdown has been detailed by the British at this stage, but analysts said it was likely that Saudi Arabia and North America continue to dominate the sales list.
The decline saw the British share of the world defense export market for 2011 slip to 15 percent, the lowest it has been for several years.
Despite that, Britain retained its position as the second-biggest supplier behind the U.S. but just ahead of Russia and France, said the DSO.
The U.S., traditionally the biggest arms exporter in the world, accounted for 35 percent of the market.
The defense export sales arm of the U.K. Trade and Investment Department said that during a 10-year rolling average, Britain retains its target of scooping a 20 percent share of the world market.
The export performance was achieved despite the fact British industry didn’t record a significant platform export last year.
Trade and Investment minister Lord Green said that the performance of the defense sector in the “absence of a major defense platform export … illustrated the remarkable breadth and depth of the U.K.’s defense industrial base.”
Industry executives here said that 2011 was an oddity in that there was a dearth of platform export opportunities that got to signature stages in the areas where Britain excels.
The figures provided by the DSO are not directly comparable with many of its rivals, as the British report export orders won in any given year while others, such as the U.S., report export equipment deliveries over 12 months.
The British figures were released against a background of defense spending cuts in Europe, the U.S. and elsewhere.
That decline among some of world’s major defense spenders plus the emergence of serious new contenders for export dollars like South Korea have increased competition in a global market that the Stockholm International Peace Research Institute said April 17 had leveled out last year at $1.74 trillion.
The think tank said the 0.3 percent rise in military spending halted a run of continuous significant annual increases averaging 4.5 percent since 2001.
Middle East and Asian military expenditure continues to grow. An earlier report from SIPRI said Asia — led by India — now had the five biggest arms importers in the world.
The other nations were South Korea, Pakistan, China and Singapore, said SIPRI
Although defense exports were declining, there was good news from the security sector where exports rose 600 million pounds to 2.6 billion pounds to continue the trend in recent years of increasing penetration of overseas markets.
Green said the rise in security-sector exports was particularly strong in the cyber area.
How much of the British security systems export rise can be accounted for by new business and how much reflects a better understanding and definition of the sector is unclear.
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