Arms and military services revenue from the industry’s 100 largest companies reached $632 billion in 2023, up 4.2% in real terms compared to 2022, according to new data released by the Stockholm International Peace Research Institute (SIPRI). Increases in arms revenue were seen across all regions, with particularly strong increases among companies based in Russia and the Middle East. Overall, smaller producers responded more effectively to new demand linked to the wars in Gaza and Ukraine, rising tensions in East Asia and rearmament programs elsewhere.
Top 100 companies increase production, strengthen workforce
Many arms producers increased production in 2023 in response to rising demand. The total arms revenue of the top 100 companies recovered after a decline in 2022. Almost three-quarters of the companies increased their arms revenue year-on-year. It is worth noting that most of the companies that increased their revenue were in the bottom half of the Top 100.
“There was a significant increase in arms revenue in 2023 and this is likely to continue in 2024,”
said Lorenzo Scarazzato, researcher at the SIPRI Military Expenditure and Arms Production Programme.
“Arms revenue of the top 100 arms producers still does not fully reflect the scale of demand and many companies have launched recruitment campaigns, suggesting that they are optimistic about future sales.”
US companies’ arms revenue grows, but production challenges remain
The 41 Top 100 companies based in the United States recorded arms revenue of $317 billion, half of the total arms revenue of the Top 100 and 2.5% more than in 2022. Since 2018, the top five companies in the Top 100 are all based in the US.
Of the 41 US companies, 30 increased their arms revenue in 2023. However, Lockheed Martin and RTX, the world’s two largest arms producers, were among those that recorded declines.
Large companies like Lockheed Martin and RTX that manufacture a wide range of weapons products often depend on complex, multi-tiered supply chains, making them vulnerable to prolonged supply chain challenges in 2023. This was particularly the case in the aerospace and missile sectors.
European arms industry lags rest of world in revenue growth
The combined arms revenue of the 27 top 100 companies based in Europe (excluding Russia) amounted to $133 billion in 2023. This was only 0.2% more than in 2022, the smallest increase in any other region of the world.
However, behind the low growth rate the picture is more diverse. European arms companies producing complex weapons systems were mainly working on older contracts during 2023 and consequently their revenues for that year do not reflect the influx of orders.
At the same time, a number of other European producers saw their arms revenues increase significantly, driven by demand linked to the war in Ukraine, particularly for ammunition, artillery, and air and ground defense systems. In particular, companies in Germany, Sweden, Ukraine, Poland, Norway, and the Czech Republic were able to tap into this demand. For example, Germany’s Rheinmetall increased its 155mm ammunition production capacity, and its revenues were boosted by deliveries of Leopard tanks and new orders, including through war-related “ring swap” programs (under which countries supply military goods to Ukraine and receive replacements from allies).
War Production Leads to Sharp Increase in Russian Arms Firms’ Revenue
The two Russian companies in the Top 100 saw their combined revenue rise by 40% to an estimated $25.5 billion. This was driven almost entirely by a 49% increase in arms revenue recorded by Rostec, a state holding company that controls many arms producers, including seven previously listed in the Top 100, for which individual revenue figures were not available.
Official figures on Russian arms production are scarce and questionable, but most analysts believe that production of new military equipment increased significantly in 2023, while Russia’s existing arsenal underwent extensive renovation and modernization. In particular, fighter jets, helicopters, UAVs, tanks, ammunition and missiles are believed to be produced in greater numbers as Russia continued its offensive in Ukraine.
South Korean and Japanese companies lead revenue growth in Asia and Oceania
The 23 companies in the Top 100 based in Asia and Oceania saw arms revenue grow by 5.7% year-on-year, reaching $136 billion. The four companies based in South Korea saw a combined 39% increase in arms revenue, reaching $11.0 billion. The five companies based in Japan saw their combined arms revenue grow by 35% to $10.0 billion. Japan’s military buildup since 2022 has led to a flurry of domestic orders, with some companies seeing the value of new orders increase by more than 300%.
The sharp rise in arms revenue among South Korean and Japanese companies reflects a broader picture of military buildup taking place in the region in response to heightened threat perceptions. South Korean companies are also looking to expand their share of the global arms market, including demand in Europe related to the war in Ukraine.
Middle Eastern arms producers see revenue growth linked to conflicts in Gaza and Ukraine
Six of the top 100 arms companies were based in the Middle East. Their combined arms revenue rose 18% to $19.6 billion. With the outbreak of the Gaza war, arms revenues for the three Israeli-based companies in the Top 100 reached $13.6 billion. This was the highest ever recorded by Israeli companies in the SIPRI Top 100. The three Turkish-based companies saw their arms revenues increase by 24% to $6.0 billion, benefiting from exports driven by the war in Ukraine and the Turkish government’s continued push towards self-reliance in arms production.
The largest Middle Eastern arms producers in the Top 100 saw their arms revenues reach unprecedented heights in 2023, and the growth looks set to continue. In particular, in addition to record arms revenues in 2023, Israeli arms producers are closing many more orders as the war in Gaza rages and spreads.
Other notable developments
- The nine China-based companies in the Top 100 saw their lowest annual percentage growth in arms revenue (+0.7%) since 2019 amid a slowing economy. Their combined arms revenue in 2023 reached $103 billion.
- The combined arms revenue of the three Indian companies in the Top 100 rose to $6.7 billion (+5.8%).
- NCSIST, the only Taiwan-based company in the Top 100, saw its arms revenue grow 27% to $3.2 billion.
- Turkey’s Baykar produces armed unmanned aerial vehicles (UAVs) that have been widely used in the war in Ukraine. Exports accounted for about 90 percent of its arms revenue in 2023, which rose 25 percent over the year to $1.9 billion.
- The UK’s Atomic Weapons Establishment, which designs, manufactures and maintains nuclear warheads, recorded the largest annual percentage increase in arms revenue (+16%) among the UK companies in the Top 100, reaching $2.2 billion.
