Global arms sales decline despite surge in wars, conflicts

Crises and wars are keeping the world on edge — yet arms sales by the top 100 weapons companies fell in 2022, according to the latest SIPRI report.

Global arms sales decline despite surge in wars, conflicts

Arms sales have been booming for years, thanks to the many flashpoints all over the world. But this trend came to a halt in 2022 — albeit only temporarily. This is according to the latest report from the Stockholm International Peace Research Institute (SIPRI), which focused on the 100 largest arms-producing companies in 2022.

According to the SIPRI Top 100 Arms-producing and Military Services Companies 2022 report, the companies generated a total of almost $600 billion (€550 billion) from the sale of weapons and military services. That was a huge sum, but revenues shrank noticeably, by 3.5%, compared to 2021.

This is first decline since the SIPRI list of the top 100 arms companies was established in 2015. "Despite the volume of new orders, which reached record levels for many companies, revenues fell, especially in the USA," said Xiao Liang, one of the report's authors.

Falling US arms sales due to production problems

Many US and European defense companies were unable to increase their production capacities due to labor shortages, rising costs, the consequences of the coronavirus pandemic and supply chain disruptions, exacerbated by the Russian war against Ukraine.

Most of the weapons supplied to Ukraine were from European and US stocks, which did not generate much revenue for the industry. Another reason is the focus of the largest arms companies on expensive systems such as aircraft, ships and missiles. But according to Liang, the military equipment "that was most in demand due to the war in Ukraine was not necessarily more expensive but rather armored vehicles, ammunition and artillery."

Above all, the 42 US defense companies on the list saw their revenues fall significantly by 7.9% to $302 billion. They accounted for 51% of the total armaments revenue of the top 100, but SIPRI assumes that longer-term orders will have a positive impact on the balance sheets in the coming years.

Source: Dw