Arms producers increase revenue to record $1 trillion
Fueled by the wars in Gaza and Ukraine, revenues of the top 100 arms manufacturers reached a record US$679 billion ($A1 trillion) last year.
The 5.9 percent increase in revenues from arms and military service sales in 2024 was also due to countries increasing their military expenditures.
The Stockholm International Peace Research Institute (SIPRI) report, published on Monday, said the revenue of $A1 trillion was the highest figure it had ever recorded.
The bulk of the increase was in companies based in Europe and the US, but there were increases worldwide, except in Asia and Oceania, where problems in the Chinese arms industry led to a slight decline.
Thirty of the 39 U.S. companies in the top 100 recorded increases, including Lockheed Martin, Northrop Grumman and General Dynamics.
Its total revenues increased 3.8 percent to $334 billion ($512 billion).
But SIPRI noted that “widespread delays and budget overruns continue to undermine development and production” on major US-led programs, including the F-35 fighter jet.
Excluding Russia, 23 of 26 companies in Europe saw arms revenues rise as the continent increased spending.
Its total revenues rose 13 per cent to US$151 billion ($A232 billion) due to demand due to the war in Ukraine and the perceived threat from Russia.
Notably, large gains were made for the Czech Republic’s Czechoslovak Group, whose revenues increased by 193 percent, thanks in part to a government-led project to supply artillery shells for Ukraine; and for Ukraine’s JSC Ukrainian Defense Industry, which gained 41 percent.
European firms are investing in new production capacity to meet greater demand, but SIPRI researcher Jade Guiberteau Ricard warned in a statement that “material supply may pose a growing challenge” and restructuring supply chains for critical minerals could be a potential complication in light of China’s export restrictions.
Two SIPRI-listed Russian companies, Rostec and United Shipbuilding Corporation, saw their arms revenues rise 23 percent to US$31.2 billion ($47.9 billion) despite sanctions that led to parts shortages.
SIPRI said domestic demand was more than sufficient to offset falling arms exports, but a shortage of skilled labor was a problem.
Arms revenues also rose in the Middle East, with the three Israeli companies in the rankings up 16 percent to $16.2 billion ($24.9 billion).
SIPRI researcher Zubaida Karim said that in 2024, reactions to Israeli actions in Gaza “seemed to have had little impact on interest in Israeli weapons” and many countries continued to place new orders.
In Asia and Oceania, revenue fell 1.2 percent to US$130 billion ($199 billion) due to a 10 percent decline in revenue for the eight Chinese companies in the index.
SIPRI said this was followed by multiple allegations of corruption in Chinese arms procurement that led to the postponement or cancellation of major contracts last year.
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