Revenues from arms sales and military services of the 100 largest companies in the industry to reach $632 billion in 2023. This is according to new data published today by the Stockholm International Peace Research Institute (SIPRI).
This is a real increase of 4.2% compared to 2022
Increases in arms revenue were reported in all regions, with particularly sharp increases among companies based in Russia and the Middle East. SIPRI says smaller producers have generally been more efficient in responding to new demand related to the wars in Gaza and Ukraine, rising tensions in East Asia and rearmament programs elsewhere.
In 2023 many gun manufacturers increased their production in response to the growing demand. Total arms revenue of companies in the top 100 has rebounded from a decline in 2022. Almost 3/4 of the companies increased their arms revenue year-over-year. It should be noted that most of the companies that increased their earnings are in the bottom half of the Top 100.
"There was a significant rise in arms revenue in 2023. and this is likely to continue into 2024," said Lorenzo Scarazzato, a researcher at SIPRI's Military Expenditure and Arms Production Program. "Arms revenues of the Top 100 arms manufacturers do not yet fully reflect the scale of demand, and many companies have started recruitment campaigns, suggesting they are optimistic about future sales.
41 companies in the Top 100 based in the United States reported $317 billion in arms revenue - half of the total arms revenue of the Top 100 and 2.5% more than in 2022. From 2018 so far, the top five companies in the Top 100 are all based in the US.
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The US and China accounted for about half of global military spending last year
Of 41 US companies, 30 increased their revenue from weapons in 2023. However, Lockheed Martin and RTX, the world's two largest arms manufacturers, were among those recording declines.
"Larger companies such as Lockheed Martin and RTX, producing a wide range of weapons products, often depend on complex, multi-tiered supply chains, making them vulnerable to continued supply chain challenges in 2023." explained Dr. Nan Tien, Director of SIPRI's Military Expenditure Program on Arms Production. "This applies with particular force to the aeronautics and missile sectors.
Total arms revenues of the 27 European companies in the Top 100 (excluding Russia) amount to $133 billion in 2023. This is only 0.2% more than in 2022. - the smallest increase of any region in the world.
Behind the low growth figure, however, the picture is more nuanced. European arms companies producing sophisticated weapons systems were mostly working on older contracts in 2023. and therefore their revenue for the year does not reflect the inflow of orders.
"Complex weapon systems have a longer lead time," Lorenzo Scarazzato specified. "For this reason, the companies that produce them react more slowly to changes in demand. This explains why their arms revenue was relatively low in 2023, despite a surge in new orders.
SIPRI: European countries import twice as many weapons
Overall, global arms-to-arms transfers have declined slightly
At the same time, a number of other European manufacturers saw significant growth in arms revenue, driven by demand related to the war in Ukraine, particularly for ammunition, artillery and air defense and land systems. In particular, companies in Germany, Sweden, Ukraine, Poland, Norway and the Czech Republic were able to take advantage of this demand. Germany's Rheinmetall, for example, has increased production capacity for 155mm ammunition, and its revenue has grown from deliveries of Leopard tanks and new orders, including through war-related "ring exchange" programs. (in which countries supply military goods to Ukraine and receive replacements from allies).
The two Russian companies in the Top 100 registered a 40% increase in their total revenue, reaching approximately $25.5 billion. This is due almost entirely to the 49 percent increase in arms revenue recorded by "Rostech" - a state-owned holding company controlling many arms manufacturers, including seven previously listed in the Top 100, for which individual revenue data could not be obtained.
"Official figures on Russian arms production are scarce and questionable, but most analysts believe that production of new military equipment increased significantly in 2023, and Russia's existing arsenal underwent extensive renewal and modernization," it said. Dr. Nan Tian. "In particular, fighter jets, helicopters, drones, tanks, ammunition and missiles are believed to have been produced in greater quantities as Russia continues its offensive in Ukraine.
The 23 companies in the Top 100 based in Asia and Oceania posted 5.7% year-over-year growth in arms revenue, reaching $136 billion. The four South Korea-based companies posted a combined 39 percent increase in arms revenue, reaching $11 billion. The five Japan-based companies saw their combined arms revenue rise 35% to $10 billion. Japan's military build-up policy from 2022. has since led to a wave of domestic orders, with some companies reporting an increase in the value of new orders of over 300%.
"The sharp rise in arms revenue among South Korean and Japanese companies reflects the bigger picture of the military buildup in the region in response to heightened threat perceptions," said Xiao Liang, a researcher at the Military Expenditure and Arms Production Program at the SIPRI. "South Korean companies are also trying to expand their share of the global arms market, including demand in Europe linked to the war in Ukraine.
Six of the top 100 arms companies are based in the Middle East. Their combined arms revenue rose 18% to $19.6 billion. With the outbreak of the Gaza war, the arms revenue of the three Israel-based companies in the Top 100 reached $13.6 billion. This is the highest figure ever recorded by Israeli companies in the SIPRI Top 100. The three Turkey-based companies, meanwhile, reported a 24 percent rise in arms revenue to $6 billion, benefiting from exports spurred by the war in Ukraine and the Turkish government's continued push toward self-sufficiency in arms production.
"The Middle East's top 100 largest arms producers saw their arms revenue reach unprecedented heights in 2023. and growth looks set to continue," said Dr. Diego López da Silva, senior researcher at SIPRI's Military Expenditure and Arms Production Program. "Specifically, in addition to achieving record arms revenues in 2023, Israeli arms manufacturers are booking many more orders as the war in Gaza rages and spreads.