SIPRI report: Revenues of top global arms producers increase amid ongoing major wars

According to newly released figures from the Stockholm International Peace Research Institute (SIPRI), the top 100 arms-producing companies worldwide generated a record $679 billion in revenue from weapons and military services in 2024. Ongoing conflicts in Gaza and Ukraine, heightened geopolitical tensions, and rising military budgets contributed to a 5.9% increase in these revenues compared to the previous year.

Europe and the United States accounted for the majority of this global growth, while all other regions also reported increases except Asia and Oceania, where issues within the Chinese defense sector led to a regional decline. In the US, Lockheed Martin, Northrop Grumman, and General Dynamics topped the list, with the combined revenues of the 39 US companies in the ranking reaching $334 billion, up 3.8% from 2023. SIPRI highlighted that major projects, including the F-35 fighter, Columbia and Virginia-class submarines, and the Sentinel ICBM, continue to face delays and cost overruns.

SpaceX appeared among the leading global arms manufacturers for the first time, with its military revenue doubling to $1.8 billion. In Europe (excluding Russia), 26 companies were listed among the top 100, with 23 reporting higher arms sales. Their total revenue grew 13% to $151 billion. The Czech company Czechoslovak Group recorded the largest percentage increase, soaring 193% to $3.6 billion due to artillery production for Ukraine. Ukraines JSC Ukrainian Defense Industry also increased its revenue by 41% to $3 billion amid ongoing Russian offensives.

European manufacturers are expanding production to counter Russian advances, but SIPRI warned that sourcing key materials, especially critical minerals, could pose increasing challenges as China tightens export controls. Russian companies Rostec and United Shipbuilding Corporation were the only two from Russia in the ranking, raising combined revenue by 23% to $31.2 billion despite sanctions related to the Ukraine war.

Arms producers in Asia and Oceania earned $130 billion in 2024, a 1.2% decline from the previous year. The drop was largely caused by a 10% decrease in Chinese arms company revenues, including a 31% fall at NORINCO, China's main land systems manufacturer. Corruption allegations led to contract delays and cancellations, casting uncertainty on Chinas military modernization plans.

Japanese and South Korean companies saw strong growth due to domestic and European demand amid regional tensions. Five Japanese firms increased combined revenues by 40% to $13.3 billion, while four South Korean companies rose 31% to $14.1 billion. Hanwha Group, South Koreas largest arms producer, recorded a 42% increase, driven largely by exports.

For the first time, nine Middle Eastern companies were included among the top 100, collectively generating $31 billion, a 14% regional increase. The UAE-based EDGE Group was excluded due to incomplete 2023 data. Israeli arms firms raised combined revenue by 16% to $16.2 billion amid the Gaza conflict, with Elbit Systems at $6.28 billion, Israel Aerospace Industries $5.19 billion, and Rafael Advanced Defense Systems $4.7 billion. Demand for Israeli drones and air defense systems surged, particularly Rafaels, due to Iranian missile and drone strikes in 2024.

Five Turkish companies entered the top 100 for the first time, earning $10.1 billion, an 11% increase. Baykar, a producer of advanced drones supplied to Ukraine, derived 95% of its $1.9 billion revenue from exports. Companies from the UK, France, Germany, Italy, India, Taiwan, Norway, Canada, Spain, Poland, and Indonesia were also featured in the ranking.

Analysis: Global Arms Production Soars Amid Geopolitical Tensions

The latest data from the Stockholm International Peace Research Institute (SIPRI) underscores a significant surge in arms production, with the world's top 100 arms manufacturers generating a record $679 billion in revenue for 2024. This marks a 5.9% increase from the previous year, driven largely by ongoing conflicts in Gaza and Ukraine, as well as rising geopolitical tensions. The impact of these factors is clear: military budgets are expanding globally, with Europe and the United States leading the charge in driving this growth.

Notably, US-based companies such as Lockheed Martin, Northrop Grumman, and General Dynamics have seen significant increases in revenue. Despite delays and cost overruns in major projects like the F-35 fighter and Columbia-class submarines, the overall trend remains upward. Meanwhile, SpaceX's entry into the arms manufacturing arena—highlighted by a 100% increase in military revenue—reflects a broader shift in the defense sector towards private sector involvement, particularly in aerospace technologies.

In Europe, excluding Russia, arms manufacturers have ramped up production to meet the needs of nations facing heightened security threats, notably Ukraine. SIPRI's report also draws attention to the growing challenges posed by critical material shortages, particularly due to tighter export controls from China. While Russia’s defense sector is still constrained by sanctions, companies like Rostec and United Shipbuilding Corporation saw notable revenue growth, further emphasizing the ongoing militarization despite international pressures.

The decline in arms production in Asia, driven by issues in China’s defense sector, reflects broader regional instability. However, countries like Japan and South Korea are seeing robust growth, particularly driven by exports. South Korean firms, for example, have enjoyed a surge in demand, driven by geopolitical tensions and increased defense spending in neighboring countries.

Finally, the rise of Middle Eastern and Turkish arms manufacturers marks a significant shift in the global arms landscape. Turkish companies, in particular, are seeing an increase in exports, with companies like Baykar becoming key suppliers for Ukraine. The growing influence of these countries in the global arms market highlights a shift towards regional power players asserting their presence in global defense production.

In conclusion, the arms industry is experiencing unprecedented growth, driven by ongoing conflicts and global military needs. However, this growth also highlights the increasing complexities of global defense economics, with material shortages, geopolitical rivalries, and the rising influence of new players in the market presenting challenges to both traditional and emerging defense powers.

Sources:

• Top global arms producers’ revenues surge as major wars rage: SIPRI report