Weapons sales by the top 100 companies worldwide in the defense industry reached $632 billion last year, a 4.2% increase over 2022 as companies ramped up their production in response to surging demand, according to an analysis of global trends in military arms manufacturing by the Stockholm International Peace Research Institute.
After a dip in sales in 2022, the total arms revenues of the top 100 businesses in the industry bounced back with almost three-quarters increasing their arms revenues year-on-year. The marked rise in 2023 is likely to continue in 2024, said Lorenzo Scarazzato, a researcher with SIPRI’s Expenditure and Arms Production Program.
“The arms revenues of the top 100 arms producers still did not fully reflect the scale of demand, and many companies have launched recruitment drives, suggesting they are optimistic about future sales,” Mr. Scarazzato said in a statement.
Since 2018, the top five companies in SIPRI’s Top 100 list have been based in the U.S. The 41 U.S.-based defense manufacturers in the most recent tally recorded arms revenues of $317 billion, half the total revenues on the list and 2.5% higher than in 2022.
While 30 U.S. companies on the current list increased their revenues in 2023, Lockheed Martin and RTX (formerly known as Raytheon) — the two largest arms producers in the world — were among those registering a drop, SIPRI said.
“Larger companies like Lockheed Martin and RTX manufacturing a wide range of arms products often depend on complex, multi-tiered supply chains, which made them vulnerable to lingering supply chain challenges in 2023. This was particularly the case in the aeronautics and missile sectors,” said Nan Tian, director of SIPRI’s Military Expenditure and Arms Production Program.
South Korean and Japanese defense companies lead revenue growth among the 23 companies on SIPRI’s Top 100 list based in Asia and Oceania. Four South Korea-based arms manufacturers recorded a combined 39% increase in arms revenues, reaching $11 billion. A military build-up in Japan since 2022 drove a flurry of domestic orders, with the five Japanese companies on the list also recording a combined 39% increase in arms revenues that reached $10 billion, SIPRI analysts said.
The nine Chinese companies on SIPRI’s Top 100 list saw their smallest year-on-year percentage increase in arms revenues since 2019 — just 0.7% — with total arms revenues in 2023 reaching $103 billion. Analysts say the stagnant numbers are likely the result of China’s slowing economy.
Russia’s ongoing war against neighboring Ukraine has resulted in a sharp increase in revenues in the country’s defense industry. The two Russian companies on SIPRI’s Top 100 list saw their revenues increase by 40% to reach an estimated $15.5 billion. It was almost entirely due to the 49% increase in arms revenues recorded by Rostec, a state-owned holding company that controls several Russian arms producers, including seven that had previously been on the list before the figures became unavailable.
“Official data on Russian arms production is scarce and questionable, but most analysts believe that the production of new military equipment increased substantially in 2023 while Russia’s existing arsenal underwent extensive refurbishment and modernization,” Mr. Tian said.
Russian President Vladimir Putin on Sunday formally signed off on a new government budget that includes record spending on the military. Nearly a third of the total budget is going to defense and the war in Ukraine, up from 28.3% this year, according to a fact sheet provided by the Kremlin.
• Mike Glenn can be reached at mglenn@washingtontimes.com.