SIPRI: Arms revenue in 2024 to reach $679 billion.
The SIPRI report noted that the revenue of the 100 largest arms manufacturers is projected to increase by 5.9% in 2024 to $679 billion; the US and Europe are leading the growth, while Asia and Oceania are experiencing declines.
According to Politico, citing the Stockholm International Peace Research Institute (SIPRI) on November 30, sales of weapons and military services by the 100 largest manufacturers reached $679 billion in 2024, a 5.9% increase year-on-year – the highest figure ever recorded by SIPRI. The growth was primarily driven by companies in the US and Europe, while Asia and Oceania saw declines.
Overview of the region and businesses
In the U.S., 30 of the 39 companies in SIPRI's Top 100, including Lockheed Martin, Northrop Grumman, and General Dynamics, reported growth. The combined revenue of these 30 companies increased 3.8% to $334 billion. SIPRI also noted that prolonged delays and budget overruns continue to impact U.S.-led programs, including the F-35 fighter jet.
In Europe (excluding Russia), 23 out of 26 companies saw revenue increases, reflecting rising defense spending. Total revenue rose 13% to $151 billion, primarily driven by demand related to the conflict in Ukraine. Czechoslovak Group (Czech Republic) saw a 193% increase, partly due to a government-led project to source artillery ammunition for Ukraine. Ukrainian Defense Industry JSC saw a 41% increase.
Two Russian companies on SIPRI's list, Rostec and United Shipbuilding Corporation, saw their revenues increase by 23% to a combined $31.2 billion, despite sanctions causing component shortages. SIPRI stated that domestic demand offset the decline in exports, although a shortage of skilled labor remains a challenge.
Arms sales in the Middle East also increased. Three Israeli companies on the list saw a 16% rise to $16.2 billion. According to SIPRI researcher Zubaida Karim, the reaction to Israel's actions in Gaza does not appear to have significantly reduced interest in Israeli weapons, with many countries continuing to place orders.
Conversely, Asia and Oceania saw a 1.2% decrease to $130 billion. SIPRI cited a 10% drop in revenue for eight Chinese companies on the list as the main reason, related to procurement issues that led to delays or cancellations of many large contracts in 2024.
Technical analysis: defense industry and supply chain
SIPRI data shows a trend of expanding production capacity in Europe to meet the increasing demand for ammunition and military equipment. The 193% increase in production by the Czechoslovak Group, linked to a project to source artillery shells for Ukraine, reflects a priority on artillery shell production – a weapon consumed in high-intensity warfare.
SIPRI warns of supply chain and raw material risks. Researcher Jade Guiberteau Ricard notes that the restructuring of critical mineral supply chains could become complicated amid China's export restrictions. This could increase lead times and input costs for items requiring strategic materials.
In the US, despite its large revenue scale, SIPRI notes that complex programs like the F-35 continue to be impacted by delays and budget overruns. This is a familiar engineering and industrial risk for high-tech programs, leading to pressure on delivery schedules and lifecycle costs.
Tactical implications and readiness
Increased spending in Europe is likely to bolster ammunition inventory levels and ensure faster replenishment cycles for frontline forces. Expanded production capacity by manufacturers, provided that raw material supplies remain stable, could shorten delivery times for urgent needs.
In Russia, revenue growth driven by domestic demand suggests a priority on maintaining domestic production to offset declining exports. However, the shortage of components and skilled labor, as cited by SIPRI, are limitations that could affect quality and delivery speed.
Revenue declines in Asia and Oceania, primarily due to procurement issues in China, suggest that progress in deploying the new system may be slower than expected if contracts continue to be delayed or canceled.
Key figures
| Region/Country | Revenue/Scale | Fluctuations | Notes from SIPRI |
|---|---|---|---|
| Top 100 globally | 679 billion USD | +5.9% | This is the highest level SIPRI has ever recorded. |
| USA (30 companies) | 334 billion USD | +3.8% | Delays/budget overruns in programs like the F-35. |
| Europe (excluding Russia) | 151 billion USD | +13% | Demand related to Ukraine; expanding production capacity. |
| Russia (2 companies) | $31.2 billion | +23% | Domestic demand is offsetting declining exports; there is a shortage of components and skilled labor. |
| Israel (3 companies) | $16.2 billion | +16% | New orders remain stable; demand is minimally affected. |
| Asia and Oceania | 130 billion USD | -1.2% | Eight Chinese companies saw a 10% drop in business; major contracts were delayed or canceled. |
Comparison angle
Compared to the US, Europe is growing faster thanks to direct demand from the conflict in Ukraine and investment in expanding capacity. Conversely, Asia and Oceania are declining due to purchasing issues in China, contrasting with the growth in the Middle East and Russia.
Conclude
SIPRI data reveals a two-speed trajectory in the industry: the US and Europe maintain growth driven by industrial demand and investment, while Asia and Oceania decline due to procurement delays. Supply chain risks and complex project costs remain key variables to watch in the coming year.
