Asia Pacific budgets are set to outstrip USA and Canada by 2021, fuelled by an explosion in global arms trade that threatens the competitive edge and dominance of US, UK and European defence trade according to the biggest budget and export study since the economic downturn.
The study, The Balance of Trad, is presented to clients on 25 June by IHS Inc. (IHS), the leading global source of information and analytics.
Asia Pacific’s defence budgets are forecast to outstrip North America by 2021, up 35 percent from 2013 levels to $501bn. Total global defence budgets are forecast to continue rising, reaching $1.65tn by 2021, an increase of 9.3 percent over 2013 levels.
Israel will sell twice as many UAV (‘drone’) as the USA in 2014 and will become the biggest exporter by the end of 2013. The top UAV (‘drone’) exporter is currently the USA not Israel (despite press reports).
Global arms trade (exports and imports between countries) is up significantly despite the global economic downturn, increasing 30 percent between 2008 and 2012, from USD56.5bn to USD73.5bn. At this rate, defence trade between countries will have more than doubled by 2020. The global defence export and services market will have reached $100bn by 2018. IHS analysis suggests that world trade is at least 30 percent higher than as stated in other prominent studies publicly available. Western Europe’s share of exports declined, Asia Pacific’s rose.
Asia Pacific’s exports are up. Western Europe’s exports are down. Western Europe’s share of the global market was 34.5 percent in 2008 and fell to 27.5 percent in 2012. Asia Pacific’s share (including China) rose from 3.7 percent ($2.0bn) in 2008 to 5.4 percent ($3.7bn) in 2012 – with many in Asia doubling exports. China has jumped up from 10th place in 2008 to be the world’s 8th largest exporter today.
USA has imported $10.5BN in military related equipment and services since 2008 – foreign imports to USA are forecast to continue rising through 2013. Rise of Asia Pacific exports threatens US dominance of global defence industry.