More arms sales

Wars boost demand for arms companies

An officer at an arms fair

(Bild: AP)

The larger arms companies were able to significantly increase their sales in light of the war in Ukraine, the war in Gaza and numerous other conflicts. More heavy weapons are being purchased - production has been ramped up in many places. 

The turnover of the world's 100 largest arms companies from the sale of military equipment and services grew by 4.2 percent at constant exchange rates to a total of 632 billion dollars (just under 600 billion euros) in 2023 after a decline in the previous year. This was announced by the Stockholm-based peace research institute Sipri on Monday.

Employees are being sought in the arms industry
Many arms companies have ramped up their production in response to the growing demand, the peace researchers write. According to Sipri expert Lorenzo Scarazzato, the significant increase in arms sales is likely to continue in 2024. Revenues still do not reflect the full extent of demand and many companies have launched recruitment campaigns, indicating that they are confident about their future sales figures.

Not all companies were able to benefit from the increased demand.

(Bild: AP)

Top dog USA
Around half of global armaments revenue was generated by companies headquartered in the USA: they accounted for the first five places and a total of 41 of the companies in the top 100, with a total value of 317 billion dollars (300 billion euros) after an increase of 2.5 percent. However, the two largest defense companies in the world - Lockheed Martin and RTX (formerly Raytheon Technologies) - recorded slight declines.

According to Sipri, smaller arms manufacturers were generally more efficient in meeting the demand created by the war in Ukraine and Gaza, tensions in East Asia and various armament programs. Large corporations such as Lockheed Martin and RTX, on the other hand, often rely on complex, multi-level supply chains, which made them vulnerable to ongoing supply chain problems in 2023, explained Sipri expert Nan Tian. This was particularly the case in the aviation and missile sectors.

Strong growth in Russia and the Middle East
The peace researchers observed particularly high leaps in arms companies from Russia, which has been waging a war of aggression against Ukraine since February 2022, and in the Middle East, where war has been raging in the Gaza Strip since October 2023. The Russian state holding Rostec, which controls numerous arms companies in the country, climbed two places to 7th place with an increase of 49 percent to 21.7 billion dollars. Its arms revenues were roughly ten times that of the only Ukrainian company on the list, JSC Ukrainian Defense Industry, which came in at 2.2 billion dollars after an increase of 69 percent.

The six companies from the Middle East in the top 100, including three Israeli and three Turkish companies, increased their arms sales by a total of 18 percent. The Sipri researchers see a connection to the Gaza war, but also to Ukraine: the war in the Gaza Strip drove the arms revenues of Israeli companies by 15 percent to an all-time high of 13.6 billion dollars, and the trend is still rising.

Meanwhile, Turkish companies benefited from exports boosted by the war in Ukraine and the government in Ankara's efforts to achieve independence in arms production. In Asia, companies in South Korea and Japan stood out with overall growth of 39% and 35% respectively.

Slight growth in Europe
In no other region of the world was the increase in arms sales smaller than in Europe (excluding Russia). There, they increased by just 0.2 percent to 133 billion dollars. However, the peace researchers noted that this conceals a more differentiated picture: European companies were primarily working off older contracts for complex weapons systems with longer lead times, meaning that their figures did not reflect the increase in new orders.

At the same time, some European arms manufacturers managed to meet demand in the wake of the war in Ukraine: According to Sipri, Rheinmetall (26th place) increased its capacity for the production of 155 mm ammunition and was able to boost its sales with the delivery of Leopard tanks as well as new orders. The result: an increase of ten percent to 5.5 billion dollars. Diehl (ranked 83rd) also saw a strong rise of 30 percent thanks to increased sales of ground-based air defense systems and ammunition.

ThyssenKrupp (66th), on the other hand, reported a drop of 5.7 percent and Hensoldt (73rd) a small increase of 2.2 percent.

"Massive dominance of the USA"
The peace organization Greenpeace spoke of a "massive dominance" of corporations from the USA and Europe, which accounted for around two thirds of the companies in the top 100. "The figures openly contradict the West's allegedly inadequate defense capability and calls for more and more armament," criticized Greenpeace disarmament expert Alexander Lurz.