Arms firms face declining Western sales

The big financial squeeze is hurting businesses everywhere, and the arms trade has not escaped the deep cuts in state spending in the western world.

With defence budgets shrinking, this year’s Eurosatory arms fair near Paris was a chance to beat the blues, with exhibitors eight percent up. But where are the new sales to come from?

“The US, UK and Europe are seeing either flattening or falling defence spending which means that defence companies are looking to other markets. So you’ve got Latin America, the Middle East, Asia in particular. The main trend is governments, countries, working out that in the West they can’t spend as much money as they have been,” said Matthew Bell of IHS Jane’s Industry magazine.

European firms lose out in the race for international sales, and the only way forward to be able to compete with arms giants America and Russia is for industry-wide consolidation between all of Europe’s major defence firms.

However, in their neverending search for bigger bangs, many smaller European firms report profitable entries into niche product markets and innovative areas the bigger firms have missed.

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