Never before have arms companies earned as much income as they will in 2024. This was stated in a report by the Stockholm International Peace Research Institute (SIPRI), based on data from the 100 largest arms companies in the world. Its income from the sale of weapons and military services reached $679 billion in 2024.
Already in 2023, the escalation of geopolitical tensions and, above all, the war in Ukraine, has increased the demand for weapons. Can it then be said that the war in Ukraine is beneficial for these companies? “For the defense sector, no doubt,” SIPRI’s Nan Tian, one of the report’s authors, told DW. He added: “Over the past two years, the revenues of these arms companies have increased significantly.”
Particularly high growth for German companies
Of the 100 companies based on the study, 39 are based in the United States and represent nearly half of global revenues from the arms trade. But its recent growth has been relatively modest, amounting to only 3.8 percent. By contrast, the 26 European (non-Russian) companies in the report collectively saw a 13 percent increase in revenue.
German companies were particularly successful, achieving a 36% increase in revenue. “This is almost entirely due to the Russian invasion of Ukraine,” Nan Tian asserts. “There has been increasing demand from the German army. Companies such as Rheinmetall and Diehl have been manufacturing tanks, armored personnel carriers and ammunition to replace military aid sent to Ukraine, but also to increase their own reserves.”
Russia: The war economy that defies sanctions
Russia appears separately in the SIPRI report. Russian defense companies have experienced exceptional growth. Although its export revenues declined due to international sanctions, strong growth in domestic demand offset the losses.
But Russia represents a special case, notes Nan Tian of the Stockholm International Institute. “The country has completely changed its priorities. The economy – production – has turned into a war economy in the last three years.”
Because of international sanctions, the Russian defense industry lacks foreign components, especially avionics. But the belief that the Russian economy will collapse turns out to be wrong, Nan Tian says. “The country is in a much worse position than if it had not invaded Ukraine, because then there would be no sanctions, but Russia has proven its resilience in the face of sanctions and economic problems.”
China: Less arms revenue, but no more peace
Asia ranks third in the world in arms exports. Companies in this region as a whole saw lower revenues than in 2023. In China specifically, there was a significant 10 percent decline.
“But this has practically nothing to do with peace in the region,” explains Nan Tian. “If we think about the war in Ukraine, more war of course means more demand and therefore perhaps more revenue, but in the case of China, there have been many corruption accusations against Chinese arms companies.” This situation would have led to the cancellation or postponement of important contracts.
In contrast, Middle Eastern companies saw an increase in revenues of 14%. With nine companies, this region has never had so many companies in SIPRI’s annual statistics. Three of them reside in Israel.
The largest companies are based in the United States.
The five largest defense companies in the world, according to SIPRI statistics, are Lockheed Martin, RTX (formerly Raytheon Technologies), Northrop Grumman, BAE Systems, and General Dynamics. With the exception of the British company BAE Systems, all of them are based in the United States.
This is the first time since 2017 that a non-US-based company has appeared among the top five defense companies. In comparison, the military arm of the European consortium Airbus ranks 13th among the 100 largest companies, while Germany’s Rheinmetall ranks 20th.
In 2024, four of the 100 companies were based in Germany: Rheinmetall, Thyssenkrupp, Hensoldt, and Diehl. Together, they generated revenue of $14.9 billion. The war in Ukraine generated important orders, especially for Diehl, including ground defense systems.
The order for 155 mm artillery shells for the German Army represents the largest ammunition order in the company’s history. Rheinmetall recorded a 47 percent increase in its revenues from tanks, armored vehicles and ammunition.
For its part, KNDS, a Franco-German consortium that includes tank manufacturers Krauss-Maffei, Wegmann and Nexter, ranked 42nd on the SIPRI list. This joint venture has also seen growth. In this case, the war in Ukraine and the Russian threat ensured a complete record for the regime.
(ms/CP)