Europe Asia News

According to the newly published annual report of the Aerospace, Security and Defence Industries Association of Europe (ASD), the combined turnover of the 4,000 companies it represents rose by 10.1% to 325.7 billion euros.

The defence sector led this growth, with an annual increase of 13.8% and turnover of 183.4 billion euros, compared with a 6% rise in civil aviation.

Direct employment grew by 6.9% to 1.103 million, marking the highest level on record. Once again, the defence sector accounted for the bulk of this increase, with direct jobs rising by 8.6% to 633,000.

Micael Johansson, CEO of Saab and President of ASD, wrote that “our sectors are not only vital for the European economy. Above all, they are crucial for Europe’s security, connectivity and sustainability and, ultimately, for its sovereignty and position on the global stage in a rapidly changing and increasingly unpredictable geopolitical and technological environment.”

“Investment in our industries is investment in Europe’s competitiveness, sustainability, resilience and sovereignty. The next multiannual EU budget must reflect this as a priority,” he added.

EU member states have sharply increased their defence spending since the start of the Russia–Ukraine war.

As a result, member states spent 343 billion euros on defence last year, far more than the 251 billion euros spent in 2021.

The European Commission is seeking to channel more investment into the sector through a series of packages that either give EU countries greater fiscal flexibility on defence spending or cut red tape for defence companies so that they can produce more and faster.

The bloc’s proposal for the next seven-year budget also reflects this shift, with 131 billion euros earmarked for defence – a substantial increase from the roughly 10 billion euros allocated in the 2021–2027 budget.

However, disagreements persist among member states over whether to prioritise European-made equipment – whose delivery can take longer as production lines switch to wartime output – or readily available foreign equipment, and over which capabilities require the most urgent investment.