Do we need another Strategic Defence and Security Review?
UK Armed Forces have secretly begun preparing for another round of defence cuts
In last July’s blog ‘Can aerospace & defence weather Brexit?’ I wrote that the economic and political impact of the UK’s decision to leave the UK would require a new Strategic Defence and Security Review (SDSR). This has proved wrong thus far; Theresa May has maintained that the strategy remains intact and therefore the 2015 SDSR is extant and fit for purpose. However, press reports over Christmas that the UK Armed Forces have secretly begun preparing for another round of defence cuts suggest that my prediction may yet come true.
Read more...Does a smaller military present an opportunity for industry?
MOD statistics show significant troop shortfall
Last month’s UK Ministry of Defence (MOD) personnel statistics show the UK Armed Forces have a personnel deficit of 4.1%, and strikingly the number of trained soldiers in the Army is at its lowest since 1750. The doomsayers note that this recruitment crisis means the UK would struggle to respond to a major crisis. However, could this not provide an interesting opportunity for the defence industry to show how the right equipment means you do not need as many troops?
Read more...The summer of hate
The impact of terrorism on the Aerospace & Defence sector
An article in the press today described the summer of 2016 as the “summer of hate”. The relentless pace of the attacks has invoked terror into the minds of ordinary people and politicians have been forced to make frequent declarations of their determination to protect their citizens. It therefore seems logical to me that the summer of 2016 will be one which shapes the near term future for Aerospace and Defence companies.
Read more...Can aerospace & defence weather Brexit
Impact of lower GDP growth on the aerospace & defence industry
I am a firm believer that GDP growth is the most important driver behind the health of the aerospace & defence sector. A strong economy increases people’s propensity to travel, and defence budgets are set as a percentage of GDP. I acknowledge that the two sides of the sector are both affected by a number of other factors (the oil price, new technologies, geopolitical tensions, etc) and both industries are global. However, the Treasury’s projection that in two years’ time UK GDP will be 3.6% lower than if we had remained in the EU forces me to pause for thought as to the possible impact of Brexit on the sector over the long term.
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