Arms Sales By World’s Biggest Defense Companies Rise To Almost $600 Billion

Sales of arms and military services by the world’s 100 largest defense companies rose by 1.9% last year to reach $592 billion, according to newly-released data from the Stockholm International Peace Research Institute (SIPRI).

In a report issued on December 5, the institute said the fastest growth from any region was in the Middle East, where the sales of the five companies included in the list grew by 6.5 per cent.

In contrast, the sales of U.S.-headquartered companies fell by 0.9% during the year. Despite that, U.S. defense contractors continue to dominate the industry, taking up 40 of the 100 places and accounting for $299 billion of revenue.

Almost a third of the total sales from the Top 100 companies are by the five largest companies on the list, all of which are from the U.S.: Lockheed MartinLMT
, Raytheon TechnologiesRTX
, BoeingBA
, Northrop GrummanNOC
and General DynamicsGD
; between them they had $192 billion in sales.

The next five on the list include one UK company, BAE Systems, and four Chinese firms – Norinco, AVIC, CASC and CETC – between them these five reported arms sales of almost $102 billion, according to SIPRI.

Supply chains and sanctions

The increase in 2021 sales marked the seventh consecutive year of rising global arms sales, but SIPRI said difficulties with supply chains during the Covid-19 pandemic led to shortages of vital components, delays in global shipping and labour shortages and meant that growth was slower than it might otherwise have been.

“We might have expected even greater growth in arms sales in 2021 without persistent supply chain issues,” said Dr Lucie Béraud-Sudreau, director of the SIPRI Military Expenditure and Arms Production Program. “Both larger and smaller arms companies said that their sales had been affected during the year.”

Russia’s invasion of Ukraine in February 2022 has added to the problems for many firms in 2022, as Russia is an important supplier of raw materials used in arms production. Russian defense companies have their own issues though, with reported difficulties in accessing semiconductors and other high-tech components as a result of war-related sanctions.

Some Russian companies have also had difficulty in receiving payments for their arms exports as a result of the trade restrictions imposed by the U.S. and other countries. Overall, there were six Russian companies in the Top 100 for 2021, with combined sales up just 0.4% to $17.8 billion.

Regional variations

Although it is still home to the biggest defense companies, North America was the only region in the world to see a fall in arms sales in 2021 in real terms, in part due to high inflation in the U.S. during the year.

A further 27 of the Top 100 companies are headquartered in Europe, with combined sales up by 4.2% last year to reach $123 billion.

Across the Asia and Oceania region, there were 21 companies in the list, with total sales of $136 billion, up 5.8% year-on-year. China contributed eight companies, with combined sales of $109 billion. It is now home to the world’s biggest military shipbuilder, China State Shipbuilding Corporation (CSSC). Among the new entrants was Taiwan’s NCSIST (ranked 60th), which specializes in missiles and military electronics and which recorded arms sales of $2 billion in 2021.

The five Middle East defense companies generated $15 billion in arms sales between them in 2021. They included three Israeli companies: Elbit Systems, Rafael and Israel Aerospace Industries; and two Turkish companies: Aselsan and Turkish Aerospace.

However, the sales figures from the region are likely to be far higher in reality, as the UAE-based Edge group was not included in the SIPRI list for 2021 as it had not disclosed its sales figures for the year – in recent years it has been ranked among the top 25 arms companies with sales of around $4.7 billion a year.