World's top arms producers see revenues rise

Revenues from sales of arms and military services by the 100 largest companies in the industry reached $632 billion in 2023, a real-terms increase of 4.2 per cent compared with 2022, according to new data released today by the Stockholm International Peace Research Institute (SIPRI), available at www.sipri.org.

Arms revenue increases were seen in all regions, with particularly sharp rises among companies based in Russia and the Middle East. Overall, smaller producers were more efficient at responding to new demand linked to the wars in Gaza and Ukraine, growing tensions in East Asia and rearmament programmes elsewhere.

In 2023 many arms producers ramped up their production in response to surging demand. The total arms revenues of the Top 100 bounced back after a dip in 2022. Almost three quarters of companies increased their arms revenues year-on-year. Notably, most of the companies that increased their revenues were in the lower half of the Top 100.

'There was a marked rise in arms revenues in 2023, and this is likely to continue in 2024,' said Lorenzo Scarazzato, a Researcher with the SIPRI Military Expenditure and Arms Production Programme. 'The arms revenues of the Top 100 arms producers still did not fully reflect the scale of demand, and many companies have launched recruitment drives, suggesting they are optimistic about future sales.'

The 41 companies in the Top 100 based in the United States recorded arms revenues of $317 billion, half the total arms revenues of the Top 100 and 2.5 per cent more than in 2022. Since 2018, the top five companies in the Top 100 have all been based in the USA.

Of the 41 US companies, 30 increased their arms revenues in 2023. However, Lockheed Martin and RTX, the world's two largest arms producers, were among those registering a drop.

'Larger companies like Lockheed Martin and RTX manufacturing a wide range of arms products often depend on complex, multi-tiered supply chains, which made them vulnerable to lingering supply chain challenges in 2023,' said Dr Nan Tian, Director of SIPRI's Military Expenditure and Arms Production Programme. 'This was particularly the case in the aeronautics and missile sectors.'

The combined arms revenues of the 27 Top 100 companies based in Europe (excluding Russia) totalled $133 billion in 2023. This was only 0.2 per cent more than in 2022, the smallest increase in any world region.

However, behind the low growth figure the picture is more nuanced. European arms companies producing complex weapon systems were mostly working on older contracts during 2023 and their revenues for the year consequently do not reflect the influx of orders.

"Complex weapon systems have longer lead times," said Lorenzo Scarazzato. "Companies that produce them are thus inherently slower in reacting to changes in demand. That explains why their arms revenues were relatively low in 2023, despite a surge in new orders."