Revenue from the sales of arms and military services by the 100 largest companies in the global defense industry was down in real terms an annual 3.5 percent in 2022, despite a sharp rise in demand, the Stockholm International Peace Research Institute (SIPRI) said on December 4.
The combined arms revenue of the world’s largest arms-producing and military services companies -- the SIPRI Top 100 -- totaled $597 billion last year, according to new data released by the research institute.
The fall in revenue “was mostly driven by overall decreases in the arms revenue of companies in the United States and Russia,” SIPRI said, adding that orders are likely to increase in the coming years.
“Large backlogs in orders and surging demand for arms during 2022 and 2023 suggest that the total Top 100 arms revenue may rise significantly in the years ahead,” the institute added.
The data also shows that Russia’s full-scale invasion of Ukraine drove an increase in demand for weapons in 2022, but many arms companies’ efforts to increase production capacity were hindered by labor shortages, rising costs, and supply chain disruptions.
Despite the year-on-year drop, the total arms revenues of the Top 100 firms were still 14 percent higher in 2022 than in 2015, the first year that SIPRI included Chinese companies in its ranking.
While three U.S. companies -- Lockheed Martin, Raytheon Technologies, and General Dynamics -- topped the list, revenue nonetheless was down for arms manufacturers in the United States and Russia as well, while among Asian and Middle Eastern companies, revenue increased substantially, it said.
Arms revenue at the seven companies in the Top 100 based in the Middle East went up by 11 percent to $17.9 billion. This was the largest annual percentage increase in arms revenue when assessed by region.
The SIPRI data also shows that China accounted for 18 percent of the Top 100’s arms revenue in 2022, the second most after the United States at 51 percent.
The aggregate arms revenue of the eight Chinese companies in the rankings increased to $108 billion, SIPRI said.
The seven British companies in the top 100 grew their revenue to $41.8 billion, 7 percent of the overall total.
The combined arms revenues of the two Russian companies in the Top 100 fell by 12 percent to $20.8 billion, SIPRI said, adding that there was an overall lack of data on Russian companies as “transparency in the Russian arms industry continued to decline.”
The only Ukrainian company in the top 100, UkrOboronProm, saw a real 10 percent drop in its arms revenue to $1.3 billion. Although its arms revenue increased in nominal terms, this was more than offset by the country’s high inflation.