A new report by Oxford Economics has demonstrated the critical role BAE Systems’ Air business plays in supporting economic growth in the UK, particularly in the North West of England.

By developing advanced technology, creating high quality jobs at its 21 UK locations and overseeing an extensive national supply chain, BAE Systems’ Air business is unlocking economic growth and driving innovation, all while bolstering UK national security. 

The report reveals that in 2023, BAE Systems’ Air business:

•   contributed over £5bn to UK GDP, alongside an additional £2.6bn in exports—a figure that has doubled since 2016 – and a further £220 million to UK government through tax revenues
•   supported almost 70,700 jobs across the UK in highly skilled roles including combat air design, engineering, support and training, 20,000 of which were in the North West
•  partnered with 1,400 UK suppliers, returning nearly £2.5bn to UK businesses through its supply chain

Simon Barnes, group managing director of BAE Systems Air, said: “At a time of great uncertainty around the world, our core focus is to serve, supply and protect those who serve and protect us.

“We also recognise the very significant impact we make to our economy and communities across the UK, and this report demonstrates how we are boosting national economic growth and job creation, with average productivity 15 per cent above the national average. 

“The report reinforces the importance of investing in national sovereign capabilities in combat air systems and UK-owned defence technology and intellectual property.  The benefits delivered for the UK are clear and significant.”

Kevin Craven, CEO of ADS said: “Military aerospace is a pivotal part of the UK economy.

“The UK’s strong defence industrial base, which is driven by export-generating companies like BAE Systems and its supply chain, is vital for our continued security.

“Collectively, the UK’s aerospace sector creates 104,000 jobs across the country and ensuring the sector thrives is deeply important for securing UK advantage.” 

The news comes after Lancashire Business View reported last week that BAE Systems has seen its order book grow to around £25bn this year amid a continued global rise in defence spending.

The group, which employs more than 11,000 people in its Lancashire operations, with thousands more working in its supply chain, revealed it is on target to hit its full year goals.

In a market update, the defence giant also highlighted a number of key milestones in the second half of the year, including projects important to Lancashire’s economy.

They include the “substantial progress” made with its Japanese and Italian industry partners towards reaching an agreement on a proposed joint venture to deliver the Global Combat Air Programme (GCAP).

A prototype of the European Common Radar System Mark 2 (ECRS Mk) was flown on a UK Typhoon aircraft for the first time with the flight taking place at its Warton plant in Lancashire.

And the sixth Astute Class submarine for the Royal Navy, Agamemnon was launched from submarines site in Barrow-in-Furness.

BAE Systems said it was confident of achieving its update guidance which suggests an increase in sales and underlying EBIT of 12-14 per cent.

At any point in time, BAE Systems Air has over 1,400 apprentices and graduates across its business.  

The report by Oxford Economics is the latest to highlight the benefit that continued investment in advanced combat air programmes such as Typhoon and Tempest generate for the wider economy