Jane’s Industry Quarterly Identifies the Golden Markets

Media Release

22 October 2008

Contact:

Mandy Castle
Jane’s Information Group
Press & PR Officer
+44 (0) 208 700 3745
amanda.castle@janes.com

Jane’s Industry Quarterly Identifies the Golden Markets

The New Frontiers for the Global Defence Industry

London (22 nd October 2008) -Jane’s Industry Quarterly has highlighted the world’s top emerging defence markets for this quarter’s edition.

Jane’s Industry Quarterly has identified the global top five emerging defence “Golden Markets” as being Australia, South Korea, Saudi Arabia, Taiwan and Brazil (see table below). These are forecast by Jane’s to grow to USD140 billion in real (2008) terms by 2010, increasing by around USD15 billion each year as economic growth enables major increases in defence expenditure.

“Economic turmoil, changing priorities and rising costs are having a severe impact on defence budgets across Europe and the United States and this is leading defence companies to need to look to new frontiers to maintain growth,” explains Jane’s Industry Quarterly editor, Guy Anderson.

The defence budget of the United States, is forecast by Jane’s to fall by USD75.9 billion to USD620 billion by 2010. The total military spending of the 27 European Union states, meanwhile, is expected to remain flat with a rise of two percent (USD6 billion) to USD297 billion over the next two years.

Anderson continued, “Growing prosperity. combined with an increasingly volatile local or regional security environment. means that military spending in parts of South America, the Middle East, Asia and Oceania is on the rise.”

Opportunities Identified by Jane’s in the Defence Marketplace

Australia is seeking to replace or upgrade around 80 percent of its military equipment over the next 10 - 15 years.
South Korea ’s far reaching spending plans have committed the government to increased defence expenditure over the next 12 years.
Brazil ’s solid economic footing and recent oil discovery mean the prospect for defence spending increases are viewed by Jane’s Industry Quarterly as good.
Saudi Arabia ranks as the highest military spender in the Middle East and eighth globally, with a declared defence budget of USD35.5 billion in 2007 and an estimated USD38.32 billion in 2008.
Taiwan has both a significant defence procurement budget and early indications of a willingness to look beyond its traditional supplier, the US.

The Golden Markets identified in this edition of Jane’s Industry Quarterly are selected on the basis of their growth rate, market size and accessibility for international defence companies. Defence budgets are indicative of market size and budget data is analysed and forecast by Jane’s Defence Budgets. It is this data that forms the foundation of the analysis.

Jane’s Golden Defence Markets Top 10

This table is scored from one to five on basis of spending, stability and openness using Jane’s methodology.

	Country	FINAL SCORE
1	United Kingdom	3.85
2	Australia	3.83
3	South Korea	3.68
4	Saudi Arabia	3.53
5	Taiwan	3.47
6	Greece	3.39
7	Germany	3.34
8	Brazil	3.23
9	Romania	3.17
10	Singapore	3.15

The stability of EU countries, coupled with relatively high defence expenditure in global terms, explains the strong presence of the UK, Germany, Greece and Romania in the final rankings. Markets within the trading bloc are viewed by Jane's as mature, and do not offer the prospect (overall) of significant growth in the short to medium term.

Top 20 Defence Markets by Forecast Budget Growth

	Country	Defence budget 2008 USD billions	Real % annual growth 2008 to 2010	Real % annual growth 2001 to 2010
1	China	57.72	7.70%	20.92%
2	Saudi Arabia	38.32	5.45%	1.44%
3	Russian Federation	39.54	3.45%	10.57%
4	South Korea	28.56	4.55%	15.05%
5	Taiwan	10.79	7.50%	7.34%
6	India	29.34	2.19%	6.92%
7	United Kingdom	79.28	0.57%	6.47%
8	Australia	23.11	1.97%	12.27%
9	Iran	11.52	3.63%	0.70%
10	United Arab Emirates	6.24	6.70%	7.71%
11	Azerbaijan	1.24	23.14%	63.85%
12	Singapore	7.70	3.66%	7.66%
13	Oman	4.53	5.99%	2.43%
14	Italy	31.08	0.85%	6.76%
15	Germany	43.32	0.58%	8.97%
16	Libya	1.98	12.77%	-3.95%
17	Brazil	24.94	0.82%	7.38%
18	Greece	8.78	2.32%	11.84%
19	Romania	2.79	7.10%	8.30%
20	Malaysia	4.40	4.16%	9.47%

It is important to note that the objective of the study was not to identify the largest market in absolute terms (that is the US, with nearly half the total global spend on defence), or examine markets that are out of bounds to most foreign defence firms (China and Russia, for example) but rather the ones that offer the largest sources of accessible future growth and opportunities to new entrants.

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Editor’s notes:

To interview Guy Anderson, Jane’s Industry Quarterly editor or to see a copy of Jane’s Industry Quarterly and the full Golden Markets Table, please contact Mandy Castle, PR Manager, Jane's Information Group (contact details at top of page).

About Jane’s Information Group

Jane’s, an IHS company (NYSE: IHS), is the leading open source information provider and conference organiser on defence, international risk and national security to governments, militaries, industries and academia around the globe. Jane’s is headquartered in London, and also has offices in Alexandria, Virginia; Singapore; Tokyo; Dubai; and Sydney, Australia. For more information, please visit our award-winning website, www.janes.com.

About IHS (www.ihs.com)

IHS (NYSE: IHS) is a leading global source of critical information and insight, dedicated to providing the most complete and trusted data and expertise. IHS product and service solutions span four areas of information that encompass the most important concerns facing global business today: Energy, Product Lifecycle, Security and Environment. By focusing on customers first, IHS enables innovative and successful decision-making for customers ranging from governments and multinational companies to smaller companies and technical professionals in more than 180 countries. IHS has been in business since 1959 and employs approximately 3,500 people in 20 countries.