Thursday, 7th December 2023
Revenues from sales of arms and military services by the 100 largest companies in the industry totalled $597 billion in 2022, 3.5 per cent less than 2021 in real terms, even as demand rose sharply, according to new data released today by the Stockholm International Peace Research Institute (SIPRI)
The decrease was chiefly the result of falling arms revenues among major companies in the United States. Revenues increased substantially in Asia and Oceania and the Middle East. Outstanding orders and a surge in new contracts suggest that global arms revenues could rise significantly in the next few years.
Demand for weapons grows but production lags behind
Russia’s full-scale invasion of Ukraine and geopolitical tensions around the world fuelled a strong increase in demand for weapons and military equipment in 2022. However, despite receiving new orders, many US and European arms companies could not significantly ramp up production capacity because of labour shortages, soaring costs and supply chain disruptions that were exacerbated by the war in Ukraine. In addition, countries placed new orders late in the year and the time lag between orders and production meant that the surge in demand was not reflected in these companies’ 2022 revenues.
‘Many arms companies faced obstacles in adjusting to production for high-intensity warfare,’ said Dr Lucie Béraud-Sudreau, Director of SIPRI’s Military Expenditure and Arms Production Programme. ‘However, new contracts were signed, notably for ammunition, which could be expected to translate into higher revenue in 2023 and beyond.’
In contrast to the major US and European suppliers, companies in Asia and Oceania and the Middle East saw their arms revenues grow significantly in 2022, demonstrating their ability to respond to increased demand within a shorter time frame. This was especially true in countries where companies maintain responsive ‘ever-warm’ manufacturing capabilities, such as Israel and South Korea, and those where companies tend to rely on short supply chains. Learn More /…
About SIPRI (Stockholm International Peace Research Institute)
SIPRI is an independent international institute dedicated to research into conflict, armaments, arms control and disarmament. Established in 1966, SIPRI provides data, analysis and recommendations, based on open sources, to policymakers, researchers, media and the interested public. Based in Stockholm, SIPRI is regularly ranked among the most respected think tanks worldwide. Learn More /...
About the SIPRI Arms Industry Database
The SIPRI Arms Industry Database was created in 1989. At that time, it excluded data for companies in China, the Soviet Union and countries in Eastern Europe. The current version contains data for 2002–22, including data for companies in Russia. Chinese companies are included from 2015 onwards.
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