Barclays’ defence research finds that almost 6 in 10 UK manufacturing businesses expect positive impact from defence investment, but leaders call for targeted support.

The Barclays Business Prosperity Index[i] shows strong support for the Government’s increased defence spending (74 per cent)[ii]. This sentiment is consistent across business sizes and regions, reflecting a broad consensus that defence sector investment is both necessary and potentially beneficial for the wider economy.

Of those surveyed, 24 per cent have been involved in defence contracts or supply chains on one occasion, 17 per cent on multiple occasions and 25 per cent have never been but are interested in future opportunities.

Among those expecting a positive impact, 56 per cent see boosting research and development in new technologies as the main benefit to their business. Half (50 per cent) highlight the creation of new contracts and opportunities within local supply chains as a key benefit, while 53 per cent anticipate enhanced skills and workforce development.

More broadly, 51 per cent believe defence spending will attract new investment or partnerships to their region, and 40 per cent expect it to support SME growth, innovation, and job creation locally.

Yet despite optimism, a third of businesses (32 per cent) said they require simplification of regulatory requirements, such as compliance reporting, clearer guidance on the procurement process (33 per cent) and a trusted supplier white list to streamline due diligence (30 per cent).

LEADERS CALL FOR FURTHER SUPPORT

To unlock the full potential of defence-driven growth, business leaders are calling for three key things: improved access to sector-specific skills and training (34 per cent); greater transparency around ESG expectations and reputational safeguards (34 per cent); and financial incentives or support schemes (34 per cent).

Almost four in 10 (38 per cent) say a Defence Guarantee Scheme, where the government would offer financial guarantees for capital and investment, would encourage them to enter the supply chain.

The findings from the Barclays Business Prosperity Index defence research were featured at the Department for Business and Trade’s Global Space Finance Summit on Wednesday 10 December 2025.

“Our research shows that businesses are increasingly interested in supporting the defence sector, with many ready to innovate and enter supply chains.

“To unlock the full potential of defence-driven growth, we urge the Government to sustain momentum on defence investment by streamlining export and compliance regulations and providing targeted support such as a Defence Guarantee Scheme. These steps will help more UK businesses seize the opportunities presented by increased defence investment.”

BARCLAYS BUSINESS PROSPERITY FUND

To support businesses to invest for growth, The Barclays Business Prosperity Fund is available for new and existing Business Banking customers and UK Corporate Banking clients across the UK to apply for lending and refinancing on existing projects. Businesses can find out more via the website below. 
 
£22bn is the total amount of lending Barclays has available to lend and support business growth among Business Banking and UK Corporate Banking clients in 2025. Subject to normal lending assessment, status and application. Terms and conditions apply.

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