Vietnam's defence budget reach USD1.4 billion in 2014

 The second annual IHS Balance of Trade report has revealed that 2013 was another strong growth year for defence trade. Traditional markets expanded by USD2 billion to USD67 billion, while some emerging markets are starting to impact on the structure of the global market, according to the 2014 report, which examined more than 30,000 export programmes extracted from IHS Jane's DS Forecast data.

In the upper tier of exporting countries and companies, significant changes are playing out. Having already overtaken the UK, Italy, and Israel in East Asia, South Korea is forecast by 2016 to generate higher exports revenue in the region than China.

Among purchaser states, India's imports surged in 2013 with deliveries of major US exports, including initial Boeing P-8 Poseidon maritime surveillance aircraft. Led by its demand for aviation equipment, China has overtaken South Korea as East Asia's largest defence importer. IHS Balance of Trade 2014 data show that Australia, Indonesia, Mexico, and Vietnam will be increasingly desirable export markets over the decade, while European markets and Japan are expected to weaken.

Trade in aerospace continued to grow in 2013, while other platform markets are projected to enter a relatively lean period; military ships remained a relatively small export market at USD5 billion, and military vehicles will decline in 2014.

At a company level, Boeing continues to dominate and Raytheon has temporarily pulled ahead of Lockheed Martin, which should regain its ranking through a strong order backlog.

Overall, 2014 is already forecast to be another growth year. With a number of major programmes yet to be decided, there is also potential for further significant change to exporters and importers as new opportunities and trading partnerships continue to emerge.

East Asia

Major regional importers Indonesia, Taiwan, and Thailand registered an additional USD2.3 billion in imports in 2013. Indonesian budgets have nearly tripled in the past four years and DS Budgets expects them to double in the coming decade. Indonesian imports shot up from USD0.6 billion in 2012 to USD1.8 billion in 2013, driven by deliveries of aerospace and ground platforms.East Asian imports surged between by nearly 25% - from USD9.8 billion up to USD12.2 billion - although this followed a fall from 2011 to 2012. South Korea was supplanted as the region's largest importer by China in 2013.

The United States remained the primary exporter to East Asia with USD4.1 billion worth of exports, very slightly down on 2012. Meanwhile, Russia's increased trade with China lifted its sales in the region from USD2.5 billion up to USD3.4 billion.

South Korea not only expanded its regional shipments but exported globally to states such as Azerbaijan, Indonesia, Iraq, the Philippines, the United Kingdom, and Turkey. South Korean exports totalled USD0.6 billion in 2013 and are forecast to hit USD1.5 billion by 2015, partly at the expense of some major Western companies.

China's exports relied almost entirely on a few economically challenged clients, primarily Bangladesh, Pakistan, and Venezuela.

Vietnam's defence budget has soared since 2009, propelling a surge in imports from USD0.3 billion up to USD0.9 billion last year. Based on signed contracts, this total should reach USD1.4 billion in 2014.

IHS Jane's