The increasing tension in the world, war and increase in security expenditure have given a new impetus to the arms industry. According to the latest report of SIPRI (Stockholm International Peace Research Institute), in 2024, the world’s top 100 defense companies will earn the largest ever revenue from the sale of weapons and military services. Last year, there was an increase of 5.9% in the earnings of these companies, which is a new record for the industry.
The biggest figure in history
The report shows that the total revenue of the top 100 arms manufacturing companies increased to $679 billion. This is the largest figure till date and its main reasons are the war between Ukraine and Russia, Israel-Hamas conflict and increase in the defense budget of many countries. These circumstances took the demand for weapons to a new level.
Dominance of American companies, but challenges remain
Out of 39 American companies included in the top 100, 30 performed well this year. Big companies like Lockheed Martin, Northrop Grumman and General Dynamics made great sales. America’s total defense sales increased to $334 billion, which means an increase of 3.8% in overall revenue. However, SIPRI also warned that continuous delays and increasing budgets in America’s big projects like the F-35 fighter jet are putting pressure on production.
Rapid pace of Europe’s defense industry
Last year was very beneficial for European companies. The growing threat from Russia and the Ukraine war have forced many countries to drastically increase their defense spending. 23 out of 26 companies in Europe reported an increase in sales and total revenue increased by 13% to $151 billion.
Czechoslovak Group of the Czech Republic recorded an incredible increase of 193%, as it played a major role in supplying artillery shells to Ukraine.
Russian defense companies also ahead
According to SIPRI, Russian companies Rostec and United Shipbuilding recorded a 23% increase in sales, despite facing shortages of many parts due to sanctions. Russia’s total revenue has been $31.2 billion. The report says that exports decreased, but domestic demand increased so much that the loss was compensated. However, lack of skilled labor is becoming a big challenge here.
Demand for weapons also increased in the Middle East
The three largest Israeli companies in the Middle East also performed well and total revenue increased by 16% to $16.2 billion. Despite opposition to the Gaza conflict, many countries of the world have continued to place new orders for weapons from Israel.
Decline in Asia and Oceania
While defense sales increased in the rest of the world, companies in Asia and Oceania saw a slight decline with total revenues falling 1.2% to $130 billion. The reason for this is believed to be corruption in China’s arms industry and cancellation of big contracts. At the same time, many defense projects were stopped or slowed down, due to which sales were affected.
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