Official Statistics

Defence export figures for 2021: methodology

Updated 6 February 2023

This document explains the methodology and quality of the defence export statistics released on 8 December 2022.

Background

The Market Analysis Cell in the Operations team, Department for International Trade, UK Defence and Security Exports (UK DSE), monitors global defence and security exports. This information is fundamental to UK DSE’s analysis and understanding of trends in the global defence and security export market. The statistics help to identify the defence and security industry’s strengths and weaknesses and how the UK compares to its competitors.

Defence export figures are collected by UK DSE via a survey to UK industry. Due to the complexities and fragmentation of the sector, security export figures are provided by contractors following open competition. Westlands Advisory provided this year’s security data, and a separate methodology paper from the company is provided with this release.

It is not advisable to combine the defence export figures with security export figures as they are recorded via a different methodology and metrics (orders/contracts vs exports/sales).

UK DSE publishes figures annually and includes figures for the previous calendar year.

Defence figures

There is no internationally agreed definition of defence exports or how they should best be measured.  Since 1984, figures for UK exports have been based on an annual survey of defence export orders won by known UK companies operating in the defence sector.

For the rest of the world (ROW), UK DSE does not have the same level of information or access. These figures are instead based on open-source information and best judgement about when contracts have been signed (not when the contract is won).

UK DSE do not monitor the value of deliveries, as is the case with some other organisations. Deliveries might take place several years after contract signature, whereas new orders or contracts offer a current assessment of the health of the market.

UK defence exports

Overview

Data about UK defence exports is collected via a survey of UK defence companies. The list of companies who take part in the survey is constantly revised to ensure that we include the maximum number of defence exporters. However, because the survey is voluntary and provided at no cost to UK DSE, some companies may choose not to participate.

The survey covers orders for defence services, support, and equipment.

The statistics relate to sales to overseas Ministries of Defence and associated Armed Services. This makes them customer-based, rather than product-based.

The survey is sent out to companies on an annual basis and the figures refer to a calendar year rather than a financial year.

Although details of individual orders are requested (for example, product value and country destination), some companies only provide aggregated figures.

Where a company has not provided a survey return, other data received by UK Defence and Security Exports from companies which verify specific exports are used where possible. Official published data on other countries’ imports from the UK are also used (for example foreign government tender websites).

Inclusions

‘New orders’ covers both legally binding contracts and routine or small orders (for example, spares) - which though not legally binding are regarded as firm.

Orders where the customer is defence related. Exports from a UK non-defence supplier may also be included if the customer is a Ministry of Defence (MOD) or defence manufacturer.

Additions to existing orders. These are identified as separate entries in the database and will be included in the year in which they fall.

Government-to-government programmes: a figure is included annually for exports achieved under the G2G programmes, (Salam Project and the Saudi British Defence Co-operation Programme). These are based on customer-approved claims submitted against budgetary provisions included within various underlying agreements for goods and services and fixed priced purchase orders. This information is provided by the MOD Saudi Armed Forces Projects Office.

Orders from companies with dual ownership, for example UK/French, noting that only the UK value of the export is included.

In a change to previous years (since 2019), all exports derived from collaborative projects including between partner nations are now counted. For example, UK Eurofighter Typhoon exports to Germany, Italy and Spain.

Orders covering international collaborative ventures, where the sale is not to one of the partners. Only the UK value-added is counted.

Joint ventures. Only the UK value-added part of the venture is counted.

Orders received by a UK-based subsidiary of a foreign company.

Contracts covering the provision of defence services overseas (consultancy, training), that benefit the UK defence industrial base.

Only the UK work content of new business is recorded.

Rest of the World (ROW)

Similar principles apply as to those above, except that information is derived from a range of reliable open sources covering contracts that have been signed.

It is not always possible to be definite about the signing of a ROW contract. In uncertain cases we make a judgement and estimation based on collateral reporting.

The total value of a contract published at the time of announcement is counted and no attempt is made to spread the value over the length of the contract.

Sometimes, when the value of a contract is not published, an estimate of its value is made based on historical sales and other factors.

Where there is a contract with several supplying nations but no indication of workshare, the value is equally divided between the suppliers. Likewise, where there is an export to several nations and no percentage split, the figure is divided equally.

Amalgamation of figures

The UK and ROW figures are combined to create a ranking of the top exporters and importers, and to show the UK’s share of the global defence export market.

Quality assurance

There is no definitive method of counting UK and rest of the world defence exports. The method UK DSE employs provides UK stakeholders with an indication of trends and health of the defence export market that they require. UK DSE data is from first-hand or credible published sources. It measures the full remit of the global defence export market and the place of UK exporters within it.

Revisions policy

Figures will be updated during the course of the year, with any information that has substantial impact on the meaning of the statistics. Adjustments are not made for subsequent cancelled orders, unless they are cancelled before the figures are published.

Other defence export data sources

HM Revenue and Customs (HMRC)

HMRC publish data on exports and imports by commodity in Overseas Trade Statistics (OTS). However, these are commodity based, rather than customer based. They record transactions at the point in time when the commodities cross borders, not when initial orders are placed. It is not possible to specify which commodities are for defence use or which are for civil use. This data is therefore not useful in assessing defence industry specific exports and imports.

In 2008, the UK government ceased producing defence export delivery data, as it was impossible to derive meaningful results. For example, the HMRC customs codes for aircraft do not differentiate between military and civil aircraft.

Export Control Joint Unit (ECJU)

The DIT ECJU publishes official data on the number of licences granted for export in the strategic export controls annual and quarterly reports. Some of these are categorised as military or dual-use. This data relates to numbers of licences and the value under each licence. The actual value of exports made under the licences is likely to be less than reported because some of these licences will not be used. For this reason this data is not useful for assessing the health of the UK defence exports sector.

Stockholm International Peace Research Institute (SIPRI)

A major provider of defence export delivery data is SIPRI. It only reports on global arms deliveries, and not new orders/contracts that we require for our business purposes.

Congressional Research Service (CRS)

Another provider of defence export (arms transfer) data is the USA’s CRS. The CRS, a component of the Library of Congress, conducts research and analysis for Congress on a broad range of national policy issues. It essentially tracks and reports on agreement and delivery data for US G2G foreign military sales (FMS) transactions, in addition to global arms transfer deliveries. Most reports can be retrieved from the Federation of American Scientists (FAS) website.

Glossary and definitions

Acronym / term Explanation
Aerospace Aircraft (including naval aircraft, aircraft related equipment (including aircraft simulators and air launched weapons))    
DIT Department for International Trade    
DSE Defence and Security Exports    
ECJU Export Control Joint Unit    
FMS Foreign military sales    
G2G Government-to-government    
HMRC HM Revenue and Customs    
HGHP High growth high potential (DIT classification)    
KAM Key account management (DIT classification)    
Land Ground based platforms (for example, tanks, armoured vehicles), equipment and ground based weapons    
MOD Ministry of Defence    
OTS Overseas trade statistics    
Prime contractor Principal contractor responsible for the delivery of goods and services to the customer. The contractor is typically the original equipment manufacturer. In some the cases, a prime contractor may outsource part of the production process to a sub-contractor.    
SME Small and medium-sized enterprise    
US DoD United States Department of Defense