A very busy 2025 has drawn to a close. Marked by global increases in defence spending, a wave of vital policy papers, and a sustained ramp-up in our advanced manufacturing production efforts, this year has reminded us that there is much to reflect on and to be proud of – despite some unwelcome curveballs.
The Industrial Strategy debate has at long last come full circle and it has brought welcome news for our sectors across the board. In aerospace, we heard that the industry has confirm a ten-year funding commitment worth up to £2.3 billion to 2035. Coupled with a year of ‘tariff hot potato’, our aerospace industry has remained resilient while continuing to ramp-up production despite the headwinds.
Yet, by no measure has it been an easy year. The reality behind the somewhat fluffy headlines is that our aerospace sector continues to face a substantial backlog of 16,000 aircraft orders. An opportunity, yes, but also a challenging delay to progress that has been compounded by higher borrowing costs and a lacklustre investment landscape. As the sector now looks towards the next generation of aircraft, it is essential that the problems we’ve faced – from bottlenecks and uncertainty – are addressed in the year ahead. The UK must be competitive in this global race otherwise we will lose market share.
In defence, the Strategic Defence Review (SDR) as well as the commitment to raise defence spending to 2.6% of GDP has sent a long-term demand signal that has empowered our sectors to do what they do best: deliver cutting-edge capabilities that uphold our national security while delivering value for money to the citizens we serve. We don’t have to look far beyond the Norwegian shipbuilding deal or the Türkiye Typhoon deal to see how this continues to translate into a rush of activity for the thousands of businesses we represent.
However, the narrative remains true in defence as it does in aerospace – words without action mean nothing. While we’re assured that effective delivery of the government’s Industrial Strategies will deliver huge benefits across our sectors, we’re over six months from the SDR and three months from the Defence Industrial Strategy and we’re yet to see new orders placed. Exports support a domestic market, they cannot replace it, and we cannot afford for this level of delay to continue into 2026. Losing sight of the realities we face – from a war in Europe, increasing cyber threats and attacks on our critical national infrastructure – is simply not acceptable.
2026 has the potential to usher an exciting period of prosperity and development for our sectors. That said, we should not underestimate the scale of the challenge ahead of us. Recent developments and funding pledges are welcome for anyone with a view of our sectors. However, we cannot afford to assume that the job is complete, or indeed, that enough has taken place. The focus for 2026 now must shift to delivering on the Government’s plans and we want to see the Government create a business and investment environment that will allow industry to continue to thrive.
With that, I want to thank you for your support and help working together for our sectors and wish you all a very happy festive season.
See you soon.
Kevin
