This is how much weapons manufacturers benefit from global wars

In light of Russia's war in Ukraine, the war in Gaza, and numerous other conflicts around the world, the world's 100 largest arms companies have once again significantly increased their sales of heavy weapons. Sales of defense equipment and military services increased in 2023 after falling by 4.2% in the previous year, reaching $632 billion (nearly €600 billion) after currency adjustments.

The Stockholm Peace Research Institute Sipri announced this in a report released on Monday. The four German listed companies (Rheinmetall, Thyssenkrupp, Hensoldt and Diehl) increased their sales by 7.5%, totaling $10.7 billion (€10.1 billion). No Swiss companies were listed in the Sipri report.

Many defense companies have increased production to meet growing demand, the peace researchers wrote. Sipri expert Lorenzo Scarazzato said arms sales are likely to continue to grow significantly in 2024. Revenues still don't reflect the full extent of demand, and many companies have launched hiring campaigns – a sign of their confidence in future sales figures.

U.S. leader

About half of global defense revenue is contributed by companies headquartered in the United States: they occupy the top five, with a total of 41 companies in the top 100, bringing the total value to 317 US$ billion (€300 billion) after an increase of 2.5%. However, two of the world's largest defense companies – Lockheed Martin and RTX (formerly Raytheon Technologies) – recorded modest declines.

According to Spry, smaller arms producers are generally better able to meet demand generated by the wars in Ukraine and Gaza, tensions in East Asia and various rearmament programs. On the other hand, large companies such as Lockheed Martin and RTX tend to rely on complex, multi-tiered supply chains, making them vulnerable to ongoing supply chain issues in 2023, explained Sipri expert Nan Tian. This is especially true in the aviation and rocket fields.

Strong growth in Russia and the Middle East

Peace researchers have observed a particularly significant increase in arms companies from Russia, which has been waging an aggressive war against Ukraine since February 2022, and the Middle East, where war has been raging in the Gaza Strip since October 2023. Rostec, the Russian state-owned holding company that controls many of the country's defense companies, moved up two places to seventh place, with a 49% increase to $21.7 billion. Its defense revenue is about ten times that of JSC, the only Ukrainian company on the list. Ukraine's defense industry grew by 69% to $2.2 billion.

According to Spry, official data on Russian weapons production is sparse and there are many question marks. However, most analyzes assume that production of new military equipment increases significantly while existing arsenals take shape.

The total arms sales of 6 Middle Eastern companies in the top 100, including 3 Israeli companies and 3 Turkish companies, increased by 18%. Researchers at Sipri found that this has something to do with the war in Gaza and Ukraine: The war in Gaza boosted arms revenue for Israeli companies by 15% to a record high of $13.6 billion, and the trend continues to rise.

Meanwhile, Turkish companies have benefited from exports driven by the war in Ukraine and Ankara's government's desire for independent arms production. In Asia, Korean and Japanese companies performed outstandingly, with overall growth rates of 39% and 35% respectively.

Europe grows slightly, but German companies grow significantly

No other region in the world has seen a smaller increase in arms sales than Europe (excluding Russia). That grew by just 0.2% to $133 billion. However, peace researchers point out that there is a more different story behind this: European companies mainly deal with older contracts for complex weapons systems with long delivery times, which means that their volumes do not reflect the increase in new orders.

At the same time, some European arms manufacturers managed to meet the demand after the war in Ukraine, among them German manufacturers: for example, according to Sipri information, Rheinmetall (ranked 26th), as the largest arms company of the Federal Republic, along with the Panther Increased tank deliveries and new orders, increased production capacity for its 155mm ammunition, and boosted sales. The result: a 10% increase to $5.5 billion.

Rheinmetall is developing guns.Image: trapezoid

Diehl (ranked 83) also achieved strong growth of 30% due to increased sales of ground-based air defense systems and ammunition. On the other hand, shares in ThyssenKrupp (66) fell 5.7%, while Hensoldt (73) edged up 2.2%.

Peace group Greenpeace said there was “huge dominance” by U.S. and European companies, which accounted for about two-thirds of the top 100 companies. Greenpeace disarmament expert Alexander Ruiz complained: “These figures contradict the West's alleged insufficient defense capabilities and increasing demands for rearmament.” (Pre/sda)

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