Australian Defence Industry Account, experimental estimates

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Estimates of the defence industry's direct contribution to the Australian economy

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Reference period
2021-22 financial year
Released
16/12/2022
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Key statistics

In 2021-22:

  • Gross value added (GVA) from Defence expenditure contributed $10.6b to the Australian economy, up 20.3% from the previous year
  • Defence industry GVA contributed 0.49% to total economy GVA
  • An estimated 61,600 employed persons were associated with Defence expenditure, a growth of 17.1% from the previous year

Broad overview

Australian Defence Industry Account

The Australian Defence Industry Account (ADIA) is a satellite account that measures the direct economic contribution and direct employment headcount of the defence industry to the Australian economy.

Australian defence industry

The Australian defence industry represents the production of goods and services invoiced to the Department of Defence. For example, if a vehicle manufacturer supplies vehicles both to Defence and the broader economy, only the activity associated with the vehicles supplied to Defence is captured.

Only the direct defence industry contributions and employment are included. For an activity to be included as part of the defence industry, there must be a direct relationship between the Department of Defence and the supplier of the good or service.

Total defence industry GVA

Gross Value Added (GVA)

GVA represents the additional economy value added through the creation of a product or the provision of a service. It removes the costs of intermediate inputs used to create the product or service from the amount received by the seller. It is the standard indicator to assess the contribution of an industry or sub-sector to the broader economy.

Gross value added (GVA) from Defence expenditure contributed $10.6b to the Australian economy in 2021-22. This was an increase of 20.3% from the previous year. In comparison, the total economy (original, current price data) grew by 11.0%.

Over the period 2016-17 to 2021-22, the defence industry’s contribution to the Australian economy grew from $6.3b to $10.6b, an increase of 67.8%. Over the same period, total economy GVA grew by 31.7%.

Defence expenditure contributed 0.49% of the total economy’s GVA in 2021-22.

(a) Source: Australian System of National Accounts, 2021-22.

(b) This contribution does not reflect the total contribution of the Defence portfolio to the Australian economy. It only captures the GVA generated by the invoiced expenditure made by the Department of Defence within the scope of the Australian economy.

Industry overview

In 2021-22, the three largest industry contributors to defence industry GVA were:

  • Professional, scientific and technical services with 43.1% of GVA
  • Manufacturing with 16.7% of GVA
  • Construction with 15.4% of GVA

Combined, the top three industries consistently contribute approximately 75% of the total defence industry GVA.

Spending in the defence industry is often linked to construction and manufacturing projects. While manufacturing captures the actual production, professional, scientific, and technical services includes the engineering, computer system design and technical expertise that goes into the planning and delivery of these projects.

*Note: Division F (Wholesale trade), Division H (Accommodation and food services) and Division Q (Health care and social assistance) are suppressed due to confidentiality requirements and are noted as n.p. (not publishable).

At the subdivision level the main contributors to defence industry GVA were:

  • Professional, scientific, and technical services (except computer system design and related services) (28.3%)
  • Computer system design and related services (14.7%)
  • Transport equipment manufacturing (12.8%)
  • Building construction (10.4%)

State overview

In 2021-22, the three largest state contributors to defence industry GVA were:

  • New South Wales ($3,383m)
  • Victoria ($2,325m)
  • ACT ($1,700m)

The states with the largest defence industry GVA growth between 2020-21 and 2021-22 were:

  • New South Wales ($728m, + 27.4%)
  • Victoria ($510m, + 28.1%)
  • South Australia ($303m, + 25.9%)

State by industry overview

In 2021-22, the Professional, scientific, and technical services industry (Div M) was the largest contributor to defence industry GVA in all states, except Western Australia, where the Manufacturing industry was the largest contributor, and the Northern Territory, where the Construction industry was the largest contributor.

*Note: Div M (Professional, scientific and technical services) data for Tasmania and Northern Territory is suppressed due to confidentiality requirements and are noted as n.p. (not publishable).

Employment overview

Defence industry direct employment

The number of paid employees (both full and part time) working for a business is known as the "Employee Headcount". The employment headcount is implemented as the normal level headcount annualised through the year to create a representative timeseries.

The number of paid employees that are associated with the defence industry is estimated as the proportion of the employee headcount funded by direct payments from Defence.

Employment associated with Defence expenditure increased by 9,000 from 52,600 in 2020-21 to 61,600 in 2021-22. This was a 17.1% increase in employment. In comparison, total employed persons in Australia grew by 3.0%.

Defence employment contributed 0.45% of the economy’s total employment (sourced from Labour Account, Australia original annualised series) in 2021-22.

The top employing industries in 2021-22 were:

  • Professional, scientific, and technical services (31.1%, or 19,100)
  • Construction (23.0%, or 14,100)
  • Manufacturing (20.3%, or 12,500)

Combined, the top three industries consistently contribute more than 70% of the total defence industry employment between 2019-20 and 2021-22.

*Note: Division F (Wholesale trade), Division H (Accommodation and food services) and Division Q (Health care and social assistance) are suppressed due to confidentiality requirements and are noted as n.p. (not publishable).

 

The top employing states in 2021-22 were:

  • New South Wales (22,700, or 36.8%)
  • Victoria (14,000, or 22.7%)
  • South Australia (8,000, or 13.1%)

The largest increases in employment in 2021-22 were in:

  • New South Wales (up 3,000)
  • Victoria (up 2,800)
  • South Australia (up 1,400)

*Note: 2021-22 data for Tasmania and Northern Territory is suppressed due to confidentiality requirements and are noted as n.p. (not publishable).

Revisions

Users should be aware that there are some revisions to the previously published GVA estimates for 2019-20 to 2020-21 due to enhancements in product and industry coding.

Data downloads

Australian defence industry data cube

Data files
Download xlsx [485.7 KB]

Methodology

Australian Defence Industry Account, experimental estimates methodology, 2021-22 financial year

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