US companies lead global arms sales

A new report on international arms sales has been released by the Stockholm International Peace Research Institute (SIPRI). The report claims that the wars in Gaza and Ukraine, as well as the rising tensions in the Middle East, were the main causes of the notable increase in global arms sales in 2023. The combined sales of the top 100 arms companies worldwide in 2023 came to $632 billion, up 4.2% from the year before.

Many arms manufacturers increased their production to meet the growing demand after supply chain issues caused a decline in 2022. The SIPRI reported that the combined yearly sales of all 100 companies it tracks surpassed $1 billion for the first time.

"Arms revenues increased significantly in 2023, and this trend is likely to continue in 2024," according to Stockholm International Peace Research Institute (SIPRI) researcher Lorenzo Scarazzato. Despite this increase in output, businesses have been hiring to cover the shortfall since demand has surpassed supply.

"Small manufacturers that specialize in components or systems with simpler supply chains have adapted more quickly to the surge in demand related to the wars in Gaza and Ukraine, as well as rearmament efforts in East Asia," said Nan Tian, director of SIPRI's Military Expenditure and Arms Production Program.

American corporations, which generate half of the world's arms sales, continued to dominate the market among the major participants. Due to supply chain issues, businesses like Lockheed Martin and RTX saw declines of 1.6 percent and 1.3 percent, respectively, while sales for U.S. manufacturers increased by 2.5 percent.

Since many of them are still fulfilling older contracts, European arms manufacturers saw an average increase in sales of just 0.2 percent. Nonetheless, demand for some goods, like ammunition and air defense systems, increased as a result of the conflict in Ukraine.

Sales of Russian weapons manufacturers increased by a staggering 40%, with state-owned Rostec reporting a 49% increase. Additionally, Turkish arms manufacturers, such as drone manufacturer Baykar, reported a 24% increase in sales, while Israeli companies reported record sales of $13.6 billion, up 15%.

With an average revenue growth of 39%, South Korean companies led the way in arms sales in Asia, followed by Japanese companies with 35%. Additionally, the average revenue of Chinese manufacturers increased by 0.7 percent, to $103 billion.