The sales of larger arms industries saw a marked increase last year due to the wars in Ukraine and the Gaza Strip and tensions in Asia, with the most spectacular turnovers being those of manufacturers in Russia and the Middle East, according to a SIPRI report released today.

The sales of arms and military services of the world’s 100 largest industries in the sector reached a total of 632 billion dollars last year, in other words, they increased by 4.2%, according to the Stockholm-based International Peace Research Institute.

They had declined in 2022 due to global giants’ inability to meet rising demand, but many companies have since been able to boost production in 2023, according to the text.

An indication of the large increase in demand: the 100 companies included in the list all without exception recorded a turnover higher than one billion dollars last year.

“We had a noticeable increase in arms sales in 2023 and this trend is expected to continue in 2024,” according to Lorenzo Scaratzato, a SIPRI researcher specializing in military spending and arms production.

The sales of the 100 largest global groups “do not yet fully reflect the scope of demand” and “many companies have started recruitment campaigns, which shows their optimism for the future”, he added.

The smaller of these industries have responded more effectively to new demand, attributed to the wars in the Gaza Strip and Ukraine, rising tensions in east Asia and rearmament programs of countries in other regions, SIPRI said.

“Many of them are specialized” in producing a specific part or item, or “produce systems that only need one supply chain” and were therefore able to react more quickly, Nan Tian, ​​the program director for the military, told AFP. expenses at the institute.

The world’s largest arms industries, the US, saw their sales increase (+2.5%) in 2023 and always continue to account for roughly half of the sales revenue at the international level, with 41 US companies among the 100 largest in the world.

Lockheed Martin (–1.6%) and RTX (incl. the former Raytheon Technologies, –1.3%), the two largest equipment manufacturers in the world, recorded on the contrary turnover reductions.

“They often depend on complex and multi-layered supply chains, which makes them vulnerable to challenges persisted in 2023 in terms of supply chains,” Nan Tian explained.

Europe, with 27 groups, it recorded a sales increase of only 0.2% last year, but this hides a double reality.

European industries, which make complex equipment systems, were still working to fulfill contracts from the previous year, which does not reflect the massive orders they received in the meantime.

Other groups, on the other hand, saw their “turnover greatly increase due to the demand linked to the war in Ukraine”, especially artillery ammunition, air defense systems and ground systems, according to SIPRI.

The figures concerning Russia, although incomplete, seem to reflect the situation in a country with a war economy.

The sales of the two Russian groups included in the ranking recorded a huge increase in turnover (+40%), mainly due to the increase in sales of the public enterprise Rostec, according to SIPRI.

Industries in the Near East (+18%) saw sales increase due to the war in Ukraine and the first months of Israel’s military operations against Hamas in the Gaza Strip after October 7, 2023.

Three Israeli manufacturers included in the ranking thus recorded a record turnover of 13.6 billion. dollars (+15%) while three Turkey-based industries, notably drone maker Baykar, saw sales jump (+24%) due to the war in Ukraine and Ankara’s willingness to spend more on military equipment.

The general trend towards retooling in Asia is especially manifested in the increase in sales of four South Korean manufacturers (+39%) and five Japanese (+35%), while in contrast in China nine major industries do rather significantly (+0.7%) , as the economy is “idling”.