The wars in and the are primarily driving demand for weapons and military equipment, but growing tensions in East Asia also have a role.
In 2023, the total revenue of the world’s 100 largest weapons producers grew to $632 billion (€598 bio) a 4.2% increase from 2022. This is according to a new report from the Stockholm International Peace Research Institute SIPRI, which analyzes the business figures of the 100 biggest arms makers.
“The biggest development in 2023 was how especially European and US companies, are finally able to translate rising demand from the war in Ukraine into actual increasing revenue,” Xiao Liang, one of the report’s authors, explained to DW.
“In 2022 we saw a lot of companies were still struggling with supply chain disruptions and were having difficulties ramping up their production,” he added.
Russia: Rising military spending, little transparency
Russian weapons companies recorded the biggest increases in 2023. According to the SIPRI researchers, their income increased by 40%. Russia had initially hoped for a quick victory over Ukraine. When that did not materialize, . According to the report, rockets, tactical aircraft and drones were produced, sometimes around the clock, to compensate for the losses at the front.
There is a reason only two Russian companies are listed among the top 100 in the world. “Most companies stopped publishing financial figures since 2022,” Xiao Liang explained. But not all. The Stockholm-based researchers analyzed data from Rostec, which is ranked as the 7th largest armaments company worldwide. “[It] is actually a holding company of 7 or 8 different Russian companies that we used to have in our database. So, it still gave a pretty good representation of how these companies are doing,” Liang emphasized. The sole Ukrainian company in the top 100 is JSC Ukrainian Defense Industry. Its revenue rose by 69%.
German manufacturers on the rise
For European weapons makers (excluding Russia), the war in Ukraine has had differing impacts. Some countries, such as France and Italy, recorded significant declines in revenue. The combined revenues of German companies, on the other hand, rose by 7.5%.
In total, four German weapons producers are among the top 100 in the world: Rheinmetall, Thyssenkrupp, Hensoldt and Diehl. As the biggest German company, Rheinmetall ranks at number 26 and was able to increase its revenues by 10%. Its products include 155mm artillery ammunition, self-propelled howitzers, and armored vehicles — due to the war in Ukraine.
The company Diehl, which produces guided missiles and air defense systems, grew even more, reporting a revenue increase of 30% in 2023.
Weak growth in Europe
Despite the growth of individual companies, Europe was the region that experienced the least growth in the arms sector — with an increase of 0.2% in comparison with 2022. This can be attributed to low production capacities and comparatively low defense budgets.
The list of the world’s 100 biggest weapons companies continues to be topped by US giants Lockheed Martin and RTX, formerly Raytheon. Both reported slight drops in revenue in 2023. According to SIPRI, this is due to the restricted availability of special components or raw materials, which are required for aviation and the manufacturing of missiles. Demand is not the problem here, but rather the supply chains. In general, small manufacturers were able to ramp up their production more quickly than big corporations in 2023.
New situation in East Asia
In Asia, weapons makers from South Korea and Japan had significant revenue increases — a reaction to the rising tensions in the region.
Since 2022, , to a level not seen since the end of . South Korean weapons manufacturers have also managed to get a foot in the door of the European market. For example, the Hyundai Rotem company sold battle tanks to Poland.
In , where overall economic growth has slowed, the revenue for weapons companies rose by only 0.7% in 2023. That was the smallest recorded growth since 2019. According to Xiao Liang, the Chinese weapons industry will remain on course for growth despite this. “The PLA’s [People’s Liberation Army] military modernization is really a priority for the Chinese government and personally for President Xi,” Liang told DW.
Record earnings for Israeli manufacturers
Six of the 100 largest weapons manufacturers are based in the Middle East. Their sales increased by 18% to $19.6 billion in 2023. After the beginning of the war in the Gaza Strip, the revenue of the three Israeli weapons makers reached a record total of $13.6 billion.
That was the highest value ever reported by the Israeli weapons producers in the top 100. Among these companies are the manufacturers of the Iron Dome protective system, which intercepts missile attacks on Israel.
This article was originally written in German.
The post SIPRI: Weapons trade booming worldwide, especially in Russia appeared first on Deutsche Welle.
