Geopolitical Tensions Push Revenues of World’s Top Arms Producers to $632bn

Ndubuisi Francis in Abuja

Revenues from sales of arms and military services by the world’s100 largest arms-producing and military services companies reached $632 billion in 2023, a real-terms increase of 4.2 per cent compared with 2022, according to new data released by the Stockholm International Peace Research Institute (SIPRI).

The revenue surge is coming on the heels of last year’s report by SIPRI that global military expenditure reached a staggering $2.443 trillion in 2023 , with the United States of America as the dominant spender accounting for $916 billion.

SIPRI, an international institute based in Stockholm, Sweden, which  was founded in 1966, conducts scientific research on issues bordering on conflict and cooperation of importance for global peace and security, and provides data, analyses and recommendations for armed conflict.

According to the organisation’s latest data, arms revenues went up in all regions covered by the ranking.
Arms revenue increases were seen in all regions, with particularly sharp rises among companies based in Russia and the Middle East. Overall, smaller producers were more efficient at responding to new demand linked to the wars in Gaza and Ukraine, growing tensions in East Asia and rearmament programmes elsewhere.

The total arms revenues of the 41 top 100 companies headquartered in the United States grew by 2.5 per cent to $317 billion in 2023.
Also, 27 European companies in the top 100 recorded growth in arms revenues of 0.2 per cent to reach $133 billion.

The arms revenues of the two Russian companies for which data was available went up by 40 per cent to an estimated $25.5 billion due to a significant increase in orders and production.
In the same vein, the 23 companies based in Asia and Oceania in the top 100 increased their arms revenues by 5.7 per cent to $136 billion.

At $103 billion, Chinese companies had the second largest aggregate arms revenues after US companies.
However, they recorded their lowest level of growth (+0.7 per cent) since 2019 due to the country’s slowing economy.

Companies in South Korea (+39 per cent), Japan (+35 per cent) and Taiwan (+27 per cent) increased their arms revenues substantially.
The six Middle Eastern companies in the top 100 increased their aggregate arms revenues by 18 per cent to $19.6 billion.

The war in Gaza pushed Israeli companies’ arms revenues to record levels.
In 2023, many arms producers ramped up their production in response to surging demand.
The total arms revenues of the top 100 bounced back after a dip in 2022. Almost three quarters of companies increased their arms revenues year-on-year.

Notably, most of the companies that increased their revenues were in the lower half of the Top 100.
“There was a marked rise in arms revenues in 2023, and this likely continued to increase in 2024,” said Lorenzo Scarazzato, a researcher with the SIPRI Military Expenditure and Arms Production Programme.

“The arms revenues of the Top 100 arms producers still did not fully reflect the scale of demand, and many companies have launched recruitment drives, suggesting they are optimistic about future sales,” he said