Global arms sales rise on demand linked to Ukraine and Gaza wars, Asia tensions

Arms sales of the top 100 defense companies grew last year, driven by demand linked to the wars in Gaza and Ukraine as well as growing East Asia tensions, according to think tank Stockholm International Peace Research Institute.

Sales of arms and military services by the 100 companies reached $632B in 2023, up 4.2% from a year ago, bouncing back after a dip in 2022. Higher arms revenue was seen in all regions, with particularly sharp increases in companies based in Russia and the Middle East.

The trend “is likely to continue in 2024,” said Lorenzo Scarazzato, researcher, SIPRI Military Expenditure and Arms Production Program. He added that the data “did not fully reflect the scale of demand” and many companies appear to be “optimistic about future sales.”

Forty-one U.S. companies in the top 100 defense firms recorded arms revenues of $317B in 2023, half the top 100’s overall revenues and 2.5% higher than a year ago.

Notably, the world’s largest arms producers Lockheed Martin (NYSE:LMT) and RTX (NYSE:RTX) registered a drop in sales due to supply chain challenges in 2023.

Over in Europe, arms revenues of 27 defense companies (excluding Russia) totaled $133B in 2023, up 0.2% Y/Y. This is because the companies were mostly working on older contracts and the data does not reflect new orders.

Arms revenues for the two Russian companies in the top 100 list increased 40% to around $25.5B in 2023, and totaled $13.6B for three Israeli companies.

In Asia and Oceania, 23 companies’ arms revenues were $136B, up 5.7% Y/Y. This growth was led by South Korean and Japanese companies, reflecting military build-ups in the region amid heightened threat perceptions.

Arms revenues for nine Chinese companies reached $103B in 2023, up 0.7% Y/Y – the smallest increase since 2019 due to the economic slowdown.