Will increased military spending and munitions production create jobs?

14th December 2025

The scale and type of spending the government is committing to especially new factories, long-term contracts, and "always-on" production — is much more job-intensive than past defence spending. That makes job growth very likely.

However, the jobs will be:

Concentrated in specific regions and sectors

Spread over years rather than appearing overnight

Skewed toward skilled and semi-skilled work

Direct job creation: factories and production

The clearest employment impact comes from munitions and energetics manufacturing.

New and expanded facilities will require:

Production workers

Mechanical and electrical engineers

Chemical engineers and technicians

Quality control and safety specialists

Maintenance staff

Supervisors and logistics managers

Unlike short procurement bursts, "always-on" factories imply permanent roles, not temporary spikes.

These are real, physical jobs tied to buildings and machinery, not just office roles.

Indirect jobs: supply chains

Every new factory creates further employment through its supply chain:

Steel and specialist metals

Chemicals and energetics components

Machinery and tooling

Transport and warehousing

Energy and utilities

Economists usually estimate 1.5-3 additional jobs created in the wider economy for every direct manufacturing job — meaning the total employment effect can be significantly larger than headline factory numbers.

Skilled trades and apprenticeships

One notable feature of defence manufacturing is its reliance on apprenticeships and long-term skills.

Likely growth areas include:

Advanced manufacturing apprenticeships

Precision machining

Electrical and mechanical fitting

Chemical process operations

Because defence contracts run for years, companies are more willing to train workers rather than rely on short-term hires.

Regional impact

Job creation will not be evenly spread across the UK.

Areas most likely to benefit:

Regions with existing defence or heavy-industry bases

Areas selected for new munitions factories

Places with strong engineering colleges or technical training centres

This makes defence spending attractive to governments because it supports "levelling up"-style regional employment, particularly outside London and the South East.

What this won't do

It's important to be realistic.

This spending will not:

Create mass employment on the scale of post-war rearmament

Solve national unemployment problems

Lead to job growth everywhere

Defence manufacturing today is high-tech and automated, so job numbers grow steadily rather than explosively.

UK Defence Spending in 2025: What the Government Has Announced and What It Means

Over the past year, the UK government has made a series of high-profile announcements about increasing military spending and expanding munitions production. These decisions represent some of the largest sustained investments in defence since the Cold War, and reflect a broader shift in the government's approach to national security.

While much of the discussion in the media focuses on rhetoric about "war-fighting readiness", the spending announcements provide concrete evidence of how the UK plans to strengthen its armed forces and domestic defence industry.

1. Overall Defence Spending Increases

In February 2025, Prime Minister Keir Starmer announced a major uplift in defence budgets, describing it as the largest sustained increase since the Cold War. The key points were:

Defence spending will rise to 2.5% of GDP by 2027, representing roughly £13.4 billion extra per year compared to 2024-25 levels.

There is an ambition to reach 3% of GDP in the following Parliament, subject to economic conditions.

To fund this, the overseas aid budget was reduced from 0.5% to 0.3% of GDP.

In addition, the Spring Statement confirmed a £2.2 billion immediate increase to the Ministry of Defence budget in 2025-26, ensuring that the planned growth in capability starts immediately.

These announcements signal that the government intends to embed higher spending into long-term budgets, rather than rely on short-term adjustments.

2. Expanding Munitions Production

Recognising the importance of industrial capacity, the government committed £1.5 billion to build new munitions and energetics factories across the UK.

At least six new factories are planned, with construction expected from 2026 onwards.

These facilities will produce ammunition, explosives, and propellants, creating an “always-on” domestic production pipeline.

Around 13 potential sites have been identified, prioritising regions with existing industrial capacity.

This programme is expected to create hundreds of skilled jobs, from chemical and mechanical engineers to factory technicians.

The broader munitions programme is planned to reach £6 billion over the current Parliament (to 2029). This covers factory construction, stockpile build-up, and increased domestic production contracts with companies such as BAE Systems.

3. Strategic Defence Programmes

Beyond munitions, the government has announced additional strategic investments:

Attack submarines: Up to 12 new conventionally armed, nuclear-powered submarines under the AUKUS agreement with the US and Australia, enhancing maritime deterrence.

Nuclear deterrence: £15 billion investment in the UK's nuclear warhead programme.

Cyber command: £1 billion to establish a new cyber defence capability, reflecting the growing importance of hybrid threats.

Expansion of advanced fighter programmes and combat aircraft collaborations.

These investments reinforce a comprehensive approach, strengthening capabilities across land, sea, and cyber domains.

4. Why This Matters

The spending announcements indicate that the UK is seriously investing in long-term defence and industrial capability:

They will boost domestic employment, especially in engineering, manufacturing, and technical trades.

They secure sovereign production of munitions, reducing reliance on international supply chains in times of crisis.

They aim to ensure the UK can sustain operations in high-intensity conflict, strengthening both national and allied deterrence.

However, these measures do not indicate that war is imminent. They are part of a broader strategy of preparation, deterrence, and resilience, rather than a response to an immediate threat.

The government plans to raise defence spending to 2.5% of GDP by 2027, which represents roughly £13.4 billion per year in additional funding. In the short term, the Ministry of Defence will receive a £2.2 billion uplift in the 2025-26 budget to start strengthening forces immediately.

To secure domestic production capacity, the government is investing £1.5 billion in new munitions and energetics factories across the UK. Alongside this, a £6 billion munitions programme running through 2029 will fund both stockpiles and ongoing production contracts.

Strategically, the UK plans to build up its naval strength with up to 12 new attack submarines under the AUKUS agreement, while £15 billion is being allocated to the nuclear warhead programme to maintain a credible strategic deterrent. Cyber defence is also a priority, with £1 billion dedicated to establishing a new cyber command capability. Finally, investment continues in advanced fighter programmes and combat aircraft collaborations to maintain air superiority.

The UK government’s recent announcements show a clear strategy of long-term investment in defence and industrial capacity. By combining significant budget increases with concrete industrial projects, the government aims to create a military that is both technologically advanced and self-sufficient.

While this does not mean war is imminent, it does indicate that the UK is preparing to ensure readiness for a more uncertain global environment — from munitions production and submarines to cyber capability. For policymakers, industry, and regional economies, these decisions are shaping the next decade of British defence.