(CLO) Revenue from arms sales by major global manufacturers has surged over the past year, reaching a record high of $632 billion in 2023.
According to a report by the Stockholm International Peace Research Institute (SIPRI), total revenue from weapons and military services of the world's 100 largest arms companies reached $632 billion in 2023, a 4.2% increase from the previous year.
Although revenue declined in 2022 as arms manufacturers faced increased production to meet rising demand, many companies made efforts to boost output in 2023, according to the report's authors.
A clear indication of surging demand is that, for the first time in history, all 100 major arms companies have revenues exceeding $1 billion.
Lorenzo Scarazzato, a researcher on military spending and arms production at SIPRI, said: "Arms sales surged in 2023 and this trend is likely to continue into 2024."
He also emphasized that the revenue of the top 100 arms companies still doesn't fully reflect current demand, and many companies are recruiting, indicating their optimism about future revenue prospects.
For the first time, all 100 top arms companies reported sales exceeding $1 billion. Photo: Anadolu
The research institute also argues that smaller companies have performed better in meeting the demands arising from conflicts in Gaza and Ukraine, as well as rising tensions in East Asia and rearmament programs in other regions.
Nan Tian, director of SIPRI's weapons manufacturing and military spending program, said: "Many of these companies specialize in a particular component or develop systems that require specialized supply chains, enabling them to respond quickly."
Among major manufacturers, US companies saw sales increase by 2.5% and accounted for nearly half of global arms sales, with 41 US companies in the top 100. However, the world's two largest arms companies, Lockheed Martin and RTX (formerly Raytheon Technologies), reported slight declines in revenue, at 1.6% and 1.3%, respectively.
Tian said these giant companies often rely on complex and multi-layered supply chains, which makes them vulnerable to supply chain challenges in 2023.
In Europe, arms manufacturers' revenues increased by an average of only 0.2%; however, some large corporations are still fulfilling old contracts, meaning revenue does not accurately reflect the growth in orders. European arms manufacturers have seen strong growth in demand for ammunition, artillery, and air defense systems, particularly in relation to the conflict in Ukraine.
Sales of Russian arms corporations surged, primarily driven by a 49% increase in Rostec's revenue, with the combined revenue of the two Russian corporations in the ranking rising by 40%.
In the Middle East, arms companies also benefited from the conflicts, with revenues increasing by an average of 18%. Israeli and Turkish manufacturers recorded strong sales growth, with three Israeli companies achieving record revenues and three Turkish companies, notably Baykar, seeing exceptional growth thanks to demand from Ukraine and Turkish defense investments.
In Asia, rearmament was evident in South Korea and Japan, with South Korean companies experiencing average revenue growth of 39% and Japanese companies 35%. In contrast, Chinese arms manufacturers saw only a slight 0.7% increase in revenue "amidst a slowing economy," although their total revenue still reached $103 billion.
Ngoc Anh (according to Fortune)
Source: https://www.congluan.vn/doanh-thu-vu-khi-toan-cau-dat-ky-luc-632-ty-usd-do-chien-tranh-va-cang-thang-dia-chinh-tri-post323976.html
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