Defence Secretary John Healey used a 19 November speech at No 9 Downing Street to tie national security to an industrial growth plan. He set out a £1.5bn programme to build new munitions and explosives facilities and positioned defence as a reliable source of contracts, exports and regional jobs ahead of the 26 November Budget.

The security backdrop was blunt. Healey said a Russian intelligence ship, Yantar, had directed lasers at RAF P‑8 pilots while being tracked north of Scotland, prompting tighter naval rules of engagement. He also pointed to rising cyber pressure on Defence networks. For investors, the message is clear: higher threat levels are now driving multi‑year spending.

The centrepiece for industry is a “factories of the future” plan: 13 potential sites for munitions and explosives manufacturing, with construction due to start next year. Government says the package totals £1.5bn and will create more than 1,000 jobs during this Parliament as the UK rebuilds sovereign stockpiles. Site announcements and planning timetables will be the next milestones to watch.

Exports are doing heavy lifting for the ‘defence dividend’. Two flagship deals landed this autumn: a £10bn Type 26 frigate partnership with Norway and a £8bn sale of 20 Eurofighter Typhoon jets to Turkey. Both are billed to support thousands of UK jobs across shipbuilding, avionics and weapons integration and extend order‑book visibility into the 2030s.

Officials also flagged a faster contract cadence since July 2024: 1,000 major defence contracts signed, with 86% awarded to British firms, and £1.7bn of foreign direct investment into UK defence. That mix of public orders, export wins and inward investment underpins cashflows for primes and creates new entry points for SMEs across tooling, electronics, energetics and sustainment.

Policy is tilting spend towards the regions. Ministers say 70% of new investment and jobs are outside London and the South East. South Yorkshire is the case study: a new artillery plant in Sheffield is restoring barrel and howitzer production, bringing 200 skilled roles and anchoring a wider supply chain in forgings, machining and heat‑treatment.

Barrow remains the fulcrum for submarine programmes. Government data shows the yard’s workforce has risen by about 1,000 since July 2024, backed by a £200m “Plan for Barrow” to expand housing, skills and transport so projects like Dreadnought and SSN‑AUKUS can scale. Expect spill‑overs for regional training providers and housing developers as hiring continues.

The tech layer is accelerating too. Healey opened a Helsing facility in Plymouth to build sea and subsea drones, part of a privately funded UK expansion that includes the SG‑1 Fathom autonomous underwater glider. For maritime security suppliers-sensors, composites, autonomy software-this is an early signal of where demand is heading.

For SMEs, the near‑term playbook is practical: track opportunities on the Defence Sourcing Portal, align with primes’ supplier portals, and get accredited on cybersecurity. Financing may ease at the margin after the Spring Statement expanded UK Export Finance capacity for defence by £2bn and ringfenced £400m for UK Defence Innovation, alongside a pledge to direct at least 10% of the equipment budget to novel tech.

Budget context matters. The OBR’s November forecast accompanies the 26 November statement, and recent commentary points to slimmer headroom after a likely productivity downgrade. That raises the bar for programmes to demonstrate clear growth and export returns-precisely the framing ministers used for the Norway and Turkey deals.

Funding choices are not cost‑free. To reach 2.5% of GDP on defence by 2027-three years earlier than the previous timetable-the government set out changes to overseas aid, drawing criticism from development groups. The Commons Library summarises the trajectory and the additional cash for defence innovation and exports.

One final change with everyday impact: 36,347 military family homes have been brought back into public ownership, ending a costly rental deal and freeing cash for refurbishment. For contractors in retrofit, energy systems and modular build, that is a live pipeline as Defence upgrades housing stock over the decade.