According to the report, all regions witnessed increases in Arms revenueswith particularly sharp rises between Companies Which is taken from Russia The Middle East is headquartered.
In general, smaller producers have been more efficient in responding to new demand associated with the wars in Gaza And Ukraineescalating tensions in East Asia, and rearmament programs elsewhere.
The report indicates that in 2023, many arms producers ramped up their production in response to increasing demand. Total revenues also increased Weapons in the top 100 after falling in 2022. Nearly three-quarters of companies increased their weapons revenue year-on-year.
And transfer Stockholm Institute Lorenzo Scarazzato, a researcher at the institute’s Military Expenditure and Arms Production Program, said:
- “We saw a significant rise in arms revenues in 2023, and this is likely to continue in 2024.”
- “Arms revenues for the top 100 arms producers still do not fully reflect demand, and many companies have launched recruitment campaigns, indicating they are optimistic about future sales.”
American lead
The report notes an increase in corporate revenues American weaponsBut at the same time he stresses that production challenges still exist
- The 41 companies in the US-based Top 100 reported arms revenues of $317 billion, half the total arms revenues of the top 100 companies and up 2.5 percent from 2022. Since 2018, the top five companies in the US-based Top 100 have been .
- Of the 41 US companies, 30 increased their weapons revenues in 2023. However, Lockheed Martin and RTX, the world’s largest weapons producers, were among the companies that recorded a decline.
Director of the Military Expenditure and Arms Production Program at the Stockholm International Peace Research Institute, Dr. Nan Tian, said: “Large companies such as Lockheed Martin and RTX that manufacture a wide range of weapons products often rely on complex, multi-layered supply chains, making them vulnerable to ongoing supply chain challenges in “2023. This was particularly the case in the aviation and missile sectors.”
What about Europe?
As for industry European weaponsIt lags behind the rest of the world in revenue growth, according to the report, which says that total arms revenues for the 27 largest companies in Europe reached $133 billion in 2023. This is only 0.2 percent more than in 2022, the smallest increase in any region of the world. .
However, the picture is more complex behind the low growth figure, as European arms companies that produce complex weapons systems were mostly working on older contracts during 2023, and so their revenues for the year do not reflect the flow of orders.
At the same time, the revenues of a number of other European arms producers saw significant growth, driven by demand related to the war in Ukraine, especially for ammunition, artillery, air defense and ground systems.
It is worth noting that companies in Germany Sweden, Ukraine, Poland, Norway and the Czech Republic were able to benefit from this demand. For example, the German company Rheinmetall increased its production capacity for 155 mm ammunition, and its revenues were boosted by deliveries of Leopard tanks and new orders.
arms race
In a related context, Professor of International Economics, Dr. Ali Abdel Raouf Al-Idrissi, confirms in an exclusive statement to the “Eqtisad Sky News Arabia” website that regional tensions and armed conflicts contribute significantly to reshaping the global economy. By increasing the demand for weapons and developing military technology.
- Regional tensions are pushing countries to escalate their military spending to enhance their defense capabilities.
- Many countries close to conflicts are signing huge contracts to purchase weapons and military equipment, leading to a boom in demand for these products.
- To meet the increasing demand, arms companies are increasing their production capacity.
- Governments, for their part, give priority to arms manufacturing during times of war, which reflects positively on the economies of arms-producing countries such as the United States and Russia, as their exports expand to meet international needs.
- Conflicts foster a race to innovate in weapons technology, including the use of… Airplanes Drones, ballistic missiles, and artificial intelligence technologies.
- The conflict in Ukraine, for example, highlighted the importance of drones and cyber warfare technologies, prompting companies to invest heavily in this field.
He points out that large companies achieve huge profits in times of conflict thanks to long-term contracts with governments, which ensure the sustainability of companies’ revenues for long periods.
It also shows that the arms sector contributes to strengthening… Economic growth For producing countries, as it provides direct and indirect job opportunities, arms exports also contribute to improving the balance of payments, especially for countries that depend on them, such as Russia, which uses them as a means to support its hard currency in the face of economic sanctions.
Russian companies
As for Moscow, military production led to a sharp rise in arms revenues for Russian companies, according to the institute’s report.
- The two Russian companies on the Top 100 list saw their combined revenues increase by 40 percent to an estimated $25.5 billion.
- This was almost entirely due to the 49 percent increase in arms revenue recorded by Rostec, a state-owned holding company that controls several arms producers, including seven companies previously included in the top 100 for which individual revenue data could not be obtained.
Dr. Nan Tian said:
- “Official data on Russian arms production are scarce and questionable, but most analysts believe that the production of new military equipment increased significantly in 2023, while Russia’s existing arsenal underwent extensive renovation and modernization.”
- “Fighter aircraft, helicopters, drones, tanks, munitions and missiles are believed to have been produced in greater numbers as Russia continues its offensive in Ukraine.”
War in Ukraine
In turn, Dr. Rami Al-Qalioubi, a professor at the Moscow Higher School of Economics, pointed out in exclusive statements to the “Eqtisad Sky News Arabia” website that “the war in Ukraine constituted a major incentive towards militarizing the world and strengthening the arms industry sector.”
He adds: “In the Russian case, the military industry has turned into a locomotive for the Russian economy, as the Ukrainian armed forces’ destruction of Russian tanks, for example, directly affects Russian military factories that depend on state contracts to produce more equipment.”
He continues: “This is somewhat similar to artificial technological progress, as happens when companies like Apple and Samsung stop supporting old applications and force users to buy new devices. Wars also force countries to produce new weapons to replace those that were destroyed during conflicts.”
South Korean and Japanese companies lead revenue growth in Asia
Returning to the institute’s report, it indicates that:
- The 23 companies in the top 100 based in Asia and Oceania reported arms revenue growth of 5.7 percent year-on-year, to $136 billion.
- The four South Korean-based companies recorded a combined 39 percent increase in arms revenues to $11 billion.
- The five Japan-based companies saw combined arms revenues rise 35 percent to $10 billion.
- Japan’s military buildup policy since 2022 has led to a wave of domestic orders, with some companies seeing the value of new orders increase by more than 300 percent.
“The sharp growth in arms revenues between South Korean and Japanese companies reflects the bigger picture of the military buildup taking place in the region in response to the perception of a growing threat,” said Xiao Liang, a researcher at the Stockholm Peace Research Institute’s Military Expenditure and Arms Production Programme. “South Korean companies are also trying to expand their share in the global arms market, including demand in Europe in connection with the war in Ukraine,” he added.
Arms manufacturing companies in the Middle East
Six of the 100 largest arms companies were based in the Middle East. The combined arms revenues of these companies increased by 18 percent to reach $19.6 billion.
With the outbreak of war in Gaza, the arms revenues of the three Israel-based companies in the top 100 companies reached $13.6 billion. This was the highest number ever recorded by Israeli companies in the 100 largest companies according to the Stockholm Peace Research Institute.
The three companies based in Turkey saw their arms revenues grow by 24 percent to reach $6.0 billion, benefiting from exports prompted by the war in Ukraine and the Turkish government’s continued push toward self-reliance in arms production.
Dr. Diego Lopez da Silva, senior researcher in the Military Expenditure and Arms Production Program at the Stockholm International Peace Research Institute, said:
- “The Middle East’s largest arms producers in the Top 100 saw their arms revenues rise to unprecedented levels in 2023 and the growth looks set to continue.”
- “In particular, in addition to achieving record arms revenues in 2023, Israeli arms producers are booking more orders as the war in Gaza continues and spreads.”
Other areas
- The nine China-based Top 100 companies saw the smallest annual increase in arms revenues (+0.7 percent) since 2019 amid a slowing economy. Its total arms revenues in 2023 reached $103 billion.
- Combined arms revenues of the three Indian companies in the top 100 list rose to $6.7 billion (+5.8 percent).
- NCSIST, the only Taiwan-based company in the top 100, reported a 27 percent increase in its weapons revenue to $3.2 billion.
Development of weapons technology
In a related context, the academic advisor at San Jose State University and information technology expert, Dr. Ahmed Banafa, explains in a special statement to the “Eqtisad Sky News Arabia” website that regional wars and tensions are among the most prominent drivers of the global arms industry, as they play a pivotal role in enhancing Innovation, increasing productivity, and reshaping the international balance of power.
He points out that conflicts contribute to accelerating the development of military technology. Modern technologies such as artificial intelligence and drones have become one of the main pillars of contemporary wars, explaining that major companies are competing not only in increasing their production to meet the growing demand, but also in developing advanced weapons that give purchasing countries strategic advantages.
- Wars push companies and countries to develop advanced military technologies faster, which enhances the efficiency and accuracy of weapons.
- Increased demand for weapons during conflicts doubles corporate revenues, supporting new investments in research and development.
- The arms industry contributes to strengthening the economies of some countries through jobs and increased exports, but at the same time it may make the economy vulnerable to fluctuations in geopolitical conditions.
But he adds: “Despite the economic and technological gains, there is a negative impact of wars on global peace and stability,” warning of the dangers of an arms race and the spread of advanced weapons among non-governmental groups.
Dr. Banafa concludes his statements by highlighting the ethical challenges facing countries and companies producing weapons, noting the importance of finding a balance between achieving economic interests and protecting international stability and peace.
