Babcock International Group is injecting £1.3bn into the South West economy, according to a new report. Independent research conducted by global business advisory firm Oxford Economics found the defence firm, which operates Devonport dockyard, stimulates economic growth through employment, supply chain investment and tax contributions.
Babcock directly employs over 12,000 staff in the South West, with the majority based in Plymouth. The company paid £540m in staff costs in the region and spent £290m with suppliers, resulting in an estimated total contribution of £1.3bn to the South West's GDP within the same year.
While Babcock bolsters economic activity nationwide, its impact is most pronounced in the South West, particularly Plymouth, and Scotland. The Oxford Economics report also indicates the company, recently reinstated into the FTSE 100, contributed a total of £4.3bn to the º£½ÇÊÓƵ GDP in 2024, marking a substantial increase of £1bn since 2022.
For every £1 spent on º£½ÇÊÓƵ defence with Babcock, £3 is reinvested into the º£½ÇÊÓƵ economy.
Over the past two years, Babcock has expanded its workforce to 67,000 across the country, equating to one in every 550 jobs in the º£½ÇÊÓƵ. Other key findings include:
- A significant impact on the º£½ÇÊÓƵ's regional economies, including over 5,400 staff in Scotland;
- 1,800 individuals participating in Babcock's graduate and apprenticeship programmes;
- An estimated total tax contribution of £1.1bn to the Exchequer, both directly and indirectly;
- and £550m expenditure with small and medium enterprises (SMEs), bolstering over 3,800 businesses.
The company has a robust presence in its core º£½ÇÊÓƵ business sectors: nuclear, marine, land, and aviation. In 2024, Babcock's total economic contribution was £4.3bn, with the nuclear sector, including operations at Devonport, underpinning £1.9bn of this figure and supporting 30,200 jobs.
The marine division, also encompassing Devonport activities, contributed an additional £1.3bn to the firm's GDP impact and sustained 20,400 jobs nationwide. The land and aviation segments accounted for the remaining £1.1bn of Babcock's GDP influence, along with 16,400 jobs.
David Lockwood, CEO of Babcock, said: "We are proud of the role we play across the country. Babcock doesn't just help protect the º£½ÇÊÓƵ; we are helping to drive prosperity.
"At this critical time for national security, our highly experienced teams play a key role in developing sovereign capabilities to create a safe and secure world, together with our wider industry colleagues and partners. We are investing in infrastructure, technology, and skills that we need today to bolster the growth of our business for tomorrow."
Maria Eagle MP, minister for defence procurement and industry, added: "Babcock is a fantastic example of how defence is an engine for growth, creating jobs across the nation.
"The company supports thousands of skilled jobs across the South West and Scotland and invests in British SMEs, building up local communities and developing talent through graduate and apprenticeship programmes. Our Defence Industrial Strategy will help direct more defence spending to British-based firms, such as Babcock, boosting defence jobs in every nation and region."
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