UK aerospace & defence demand is scaling up. Can the supply chain keep pace?
The UK is entering its most significant period of SME defence investment in a generation. For British manufacturers, that represents an enormous opportunity but it comes with a great responsibility to be prepared for it.
The headline commitment is clear. Core defence spending is set to rise toward 3.5% of GDP by 2035, with a broader target of 5% once wider national security is included the highest level of investment in decades. That ambition is already showing up in the numbers. UK defence manufacturing exports reached a reported £20bn in 2025, a 40-year high and the sector now supports around 272,000 jobs across the country, with tens of thousands more expected as the programme ramps up.
For anyone who designs, builds or supplies electronics into this sector the direction of travel could not be more encouraging.
The demand is real. So is the challenge.
Ambition on this scale only delivers if the defence supply chain underneath it can scale too. That is where the story gets more interesting.
Government has made no secret of wanting more of this work to reach small and medium-sized manufacturers, with a target of £7.5bn a year flowing to SMEs by 2028. Today, only a small fraction of MOD contracts go directly to smaller firms but a new intent is becoming a new reality. The route from ambition to delivery runs directly through the businesses like ours, and 1000’s of others that actually make things happen.
That puts a spotlight on capability, capacity and trust. Prime contractors and OEMs scaling up their programmes need partners who can move quickly, meet the standards that defence work demands and hold their nerve when volumes rise and lead times tighten. The opportunity is genuine but it will be won by the businesses that are ready before the demand arrives, not after.
Why UK manufacturing matters right now
There is a second thread running through all of this: onshoring.
Recent years have taught every manufacturer a hard lesson about the fragility of long, global supply chains. In defence, where security, traceability and accountability are non-negotiable, that lesson lands even harder. Building closer to home reduces risk, shortens lead times and keeps the people responsible for quality within reach rather than several time zones away with a smaller carbon footprint as a welcome bonus.
It is worth remembering too, that this is not a ‘London centric’ story. Roughly 70% of defence industry jobs sit outside London and the South East, concentrated in the regional manufacturing hubs that have quietly built, strengthened and sustained this capability for decades. The fabric of UK defence manufacturing has always been regional and that is exactly where the greatest deal of the growth will be felt.
Cornelius’s view
We have spent more than 40 years building electronics for demanding industries from our facility in Port Talbot, South Wales. So this moment feels very familiar rather than daunting.
Defence work rewards the metrics we have always invested in: People, technology and now AS9100D-certified quality. Most importantly, we invest in partnership. The willingness to stand shoulder to shoulder with a partner, understand the programme and take real accountability, not only in delivering but contributing our expertise from the very start of the project. That is what onshoring should actually feel like.
The UK has set out a bold ambition for defence. Turning it into reality will depend on a supply chain that is capable, certified and ready to scale. On partners who see a rising tide of demand not as pressure but as exactly what they have been preparing for all this time.
We are prepared, capable and have the appetite to support.
Cornelius Electronics. Strong partnerships, lasting connections.