The war in Ukraine changed everything for European defence. For British manufacturers, it has created a demand environment unlike anything seen since the Cold War.
The Order Book
BAE Systems reported its largest ever forward order book last quarter. The figure — over £37 billion — reflects not just UK government contracts but a surge in export orders from NATO allies who are urgently rebuilding depleted stockpiles.
Babcock, QinetiQ, and Rolls-Royce Defence are all reporting similar dynamics. The naval sector, in particular, is stretched: the capacity to build and maintain surface vessels is fully committed for the better part of a decade.
The Skills Question
Defence manufacturing's challenge is not demand. It is supply — specifically, the supply of skilled workers. Welders, systems engineers, and programme managers cannot be trained in months.
The sector's traditional apprenticeship model is being expanded, with several major employers announcing multi-year investments in training infrastructure. Universities with engineering faculties are being approached about new defence-focused courses.
Geopolitical Context
The UK's defence industrial base has always been shaped by alliances. AUKUS — the trilateral security pact with Australia and the United States — is generating submarine-related work that will sustain significant employment in Barrow-in-Furness for decades.
