Global arms makers see record earnings as Gaza, Ukraine wars fuel demand — report

Researchers say nine out of top 100 arms firms based in Middle East and earned $31 billion last year, with three Israeli companies accounting for half the sum

STOCKHOLM, Sweden — Sales by the world’s top 100 arms makers reached a record $679 billion last year, as the wars in Ukraine and Gaza boosted demand, researchers said Monday, but production issues hampered deliveries.

The figure was 5.9 percent higher than the year before, and, over the 2015-2024 period, revenues for the top 100 arms makers have risen 26% according to a report by the Stockholm International Peace Research Institute (SIPRI).

“Last year global arms revenues reached the highest level ever recorded by SIPRI as producers capitalized on high demand,” Lorenzo Scarazzato, researcher with the SIPRI Military Expenditure and Arms Production Program, said in a statement.

Jade Guiberteau Ricard, a researcher for the same program, explained to AFP that “it’s mostly driven by Europe,” although “all areas have increased except for Asia and Oceania.”

Ricard said the increased demand in Europe was tied to the war in Ukraine and “the threat perception of Russia by European states.”

According to SIPRI, demand from Ukraine, as well as from countries militarily supporting it and which need to replenish stockpiles, helped drive demand.

Ricard added that many European countries are also now looking to expand and modernise their own militaries, “which will present a new source of demand.”

Supply woes

The United States is home to 39 of the world’s top 100 arms makers, including the top three: Lockheed Martin, RTX (formerly Raytheon Technologies), and Northrop Grumman.

US arms makers saw their combined revenues rise 3.8% to reach $334 billion in 2024, nearly half of the world’s total.

At the same time, the authors of the report noted that budget overruns and delays plague several key US-led program, like the F-35 fighter jet and the Columbia-class submarine.

The 26 of the top 100 arms makers, which are based in Europe, saw aggregate revenues grow by 13% to $151 billion.

Czech company Czechoslovak Group saw revenue spike by 193% — the sharpest increase of all the top 100 — reaching $3.6 billion.

The company benefited from the Czech Ammunition Initiative, which provides artillery shells for Ukraine.

But European arms makers are also facing difficulties in responding to the increased demand, with SIPRI noting that sourcing materials looks to become more challenging.

The authors noted that Airbus and France’s Safran sourced half of their titanium from Russia before 2022 and have had to find new suppliers.

Chinese export restrictions on critical minerals have led companies — such as France’s Thales and Germany’s Rheinmetall — to warn of higher costs as they restructure supply chains.

Two Russian arms makers are also among the top 100, Rostec and United Shipbuilding Corporation, and they saw combined revenue rise by 23% to $31.2 billion, despite a shortfall of components due to international sanctions, as domestic demand more than compensated for falling exports.

The report also noted that the Russian arms industry is struggling to find enough skilled labor “to support the projected rates of production needed to sustain Russia’s war aims.”

Israeli weapons still popular

The Asia and Oceania region was the only region to see the overall revenues of the 23 companies based there go down — their combined revenues dropped 1.2% to $130 billion.

But the authors stressed that the picture across Asia was varied, and the overall drop was the result of a larger drop among Chinese arms makers.

“A host of corruption allegations in Chinese arms procurement led to major arms contracts being postponed or cancelled in 2024,” Nan Tian, Director of SIPRI’s Military Expenditure and Arms Production Program, said in a statement.

Tian added that the drop deepened “uncertainty” around China’s efforts to modernize its military.

In contrast, Japanese and South Korean weapons makers saw their revenues increase, also driven by European demand.

Meanwhile, nine of the top 100 arms companies were based in the Middle East, with combined revenues of $31 billion.

The three Israeli arms companies in the ranking accounted for more than half of that, as their combined revenues grew by 16% to $16.2 billion.

SIPRI researcher Zubaida Karim noted in a statement that “the growing backlash over Israel’s actions in Gaza seems to have had little impact on interest in Israeli weapons.”

Israel has said it seeks to minimize civilian fatalities and stresses that Hamas uses Gaza’s civilians as human shields, fighting from civilian areas, including homes, hospitals, schools, and mosques.

The war in Gaza began after Hamas-led terrorists rampaged through southern communities on October 7, 2023, murdering some 1,200 people, mostly civilians, and taking 251 hostages.

Times of Israel staff contributed to this report.