A new report from the Stockholm International Peace Research Institute (SIPRI) reveals that global arms sales surged in 2023, driven by ongoing wars in Ukraine and Gaza, as well as rising tensions across Asia. Sales of arms and military services by the top 100 arms companies worldwide totalled $632 billion, marking a 4.2% increase over the previous year.
Following a dip in 2022, when arms makers struggled to meet rising demand, many companies managed to ramp up production in 2023, with all 100 tracked companies surpassing $1 billion in sales for the first time. SIPRI’s researcher, Lorenzo Scarazzato, noted that the surge in arms revenues is expected to continue into 2024. Despite the increase, Scarazzato pointed out that the total sales still do not fully reflect the scale of demand, with many companies expanding their workforce in anticipation of even higher sales.
Smaller arms manufacturers have been particularly effective in meeting the increased demand stemming from the wars in Ukraine and Gaza, as well as rearmament efforts in East Asia. Nan Tian, Director of SIPRI’s Military Expenditure and Arms Production Programme, explained that these smaller companies are often more nimble, focusing on specific components or systems that require streamlined supply chains, allowing for quicker responses to the rising demand.
In the United States, which remains the world leader in arms production, sales saw a 2.5% rise in 2023, with 41 US companies among the world’s top 100 arms makers. However, two of the largest firms, Lockheed Martin and RTX (formerly Raytheon Technologies), reported slight declines in revenue, as their complex supply chains were still affected by lingering disruptions.
European arms makers, particularly those producing advanced weapons systems, saw minimal growth of just 0.2%. This figure doesn’t fully reflect the substantial increase in orders, particularly from the war in Ukraine, where demand for ammunition, artillery, air defence, and land systems has spiked.
In Russia, sales by state-owned conglomerate Rostec surged by 49%, part of a broader trend of increasing militarisation in the country. The figures for Russian arms producers indicate a significant pivot towards war production. Meanwhile, manufacturers in the Middle East benefitted from the war in Ukraine and the initial months of Israel’s offensive in Gaza, seeing a remarkable 18% increase in sales.
Arms companies in Israel saw record sales of $13.6 billion, up 15%, while Turkish firms, such as drone maker Baykar, reported a 24% rise in sales, supported by investments from both Turkey and Ukraine. Meanwhile, in Asia, South Korea and Japan saw considerable growth, with their arms sales rising by 39% and 35%, respectively, reflecting the region’s broader push towards rearmament.
China, however, experienced a more modest growth of 0.7%, with its nine arms producers generating $103 billion in revenue despite slower economic growth.
The report shows how the escalating global conflicts and regional tensions have significantly boosted arms sales, with both established and emerging manufacturers benefiting from heightened military demand.
