Arms Producers Surge to Record Revenue of $679 Billion in 2024

The world’s largest arms manufacturers experienced a significant surge in revenue last year, reporting a 5.9% increase in sales of arms and military services, according to a recent report by the Stockholm International Peace Research Institute (SIPRI). This rise brought total revenues to a record $679 billion in 2024, driven largely by conflicts in Ukraine and Gaza, as well as an overall increase in military spending across various nations.

The report highlights that the majority of revenue growth came from companies based in Europe and the United States, although some regions, including Asia and Oceania, faced declines. Notably, the Chinese arms industry experienced a downturn due to several internal issues, including corruption allegations impacting procurement processes.

Regional Highlights and Key Players

Among the 100 largest arms producers, thirty out of thirty-nine U.S. companies reported revenue increases. This group includes major defense contractors such as Lockheed Martin, Northrop Grumman, and General Dynamics, which collectively saw a revenue increase of 3.8%, totaling $334 billion. Despite this growth, SIPRI noted ongoing challenges like “widespread delays and budget overruns” in key U.S. military programs, including the F-35 fighter jet.

In Europe, twenty-three of the twenty-six arms companies listed, excluding those from Russia, reported revenue growth attributed to heightened defense spending amidst the ongoing conflict in Ukraine. Their combined revenue rose by 13% to $151 billion. Significant gains were observed for the Czechoslovak Group, which experienced a remarkable 193% increase, primarily due to a government project supporting Ukraine with artillery shells. Additionally, Ukraine’s JSC Ukrainian Defense Industry saw a revenue rise of 41%.

Challenges and Future Prospects

Despite the overall growth in arms revenue, SIPRI researcher Jade Guiberteau Ricard cautioned that sourcing materials could present challenges. The ongoing restructuring of supply chains for critical minerals, especially in light of Chinese export restrictions, may complicate production efforts.

In Russia, the two companies included in SIPRI’s list, Rostec and United Shipbuilding Corporation, reported a revenue increase of 23%, reaching a combined total of $31.2 billion. This growth occurred despite international sanctions affecting the availability of components. SIPRI stated that domestic demand significantly outweighed the decline in arms exports, although a skilled labor shortage continues to pose challenges for these firms.

The Middle East also saw growth in arms revenue. Three Israeli companies listed in the report experienced a 16% increase, bringing their total to $16.2 billion. According to SIPRI researcher Zubaida Karim, the backlash over Israeli actions in Gaza did not diminish global interest in Israeli weapons, with many countries continuing to place new orders.

In contrast, the arms revenue in Asia and Oceania fell by 1.2% to $130 billion, primarily due to a 10% drop in revenue from eight Chinese companies. SIPRI attributed this decline to the impact of multiple corruption allegations that led to delays and cancellations of major contracts.

The latest SIPRI report underscores the complex dynamics of the global arms industry, shaped by geopolitical conflicts and shifting military needs. As nations continue to navigate these challenges, the demand for military equipment and services remains a critical driver of revenue for arms producers worldwide.