Defence

The European defence industry is navigating through a critical period marked by significant challenges. Decades of underinvestment and off-the-shelf procurement from non-European providers have led to dramatically reduced production capabilities in Europe, a strategic flaw that was laid bare as a consequence of Russia’s full-scale invasion of Ukraine. The reliance on third countries for essential materials such as critical minerals and semiconductors adds another layer of complexity to the situation. Addressing these issues requires a concerted effort to increase investment, streamline demand and supply, and develop strategies to reduce dependency on external sources for critical manufacturing components.

In 2023, the European defence industry represented in ASD generated a turn-over of €158.8bn, reflecting a 16.9% increase compared to the preceding year. This growth was evident across all three key sectors – military aeronautics, naval, and land – with growth rates of 15.8%, 17.7%, and 17.7%, respectively. 

Simultaneously, the European defence industry experienced a substantial increase in employment during 2023, with the total number of jobs reaching 581,000. This represented a 8.9% increase compared to the previous year. The military aeronautics sector accounted for approximately 217,000 of these jobs, while the combined workforce within the land and naval sectors accounted for 364,000 jobs within the industry.

Military exports increased by 12.6% to €57.4bn in 2023. These exports play a vital role in sustaining the competitive economic performance of the European defence industry, considering the relatively modest size of domestic European markets and the substantial development costs involved.