SIPRI report: Defense contractors’ sales are rising

For the seventh year in a row, sales at the world’s top 100 gun manufacturers have increased. The SIPRI report shows that German companies also posted significant growth. They could be even bigger without a pandemic.

The 100 largest defense companies in the world sold weapons for around 563 billion euros last year. This is again more than in the previous year, namely an increase of almost two percent. According to reports from the Stockholm Peace Research Institute (SIPRI), sales have been increasing since 2018.

However, the pandemic is slowing down this development, says analyst Diego Lopes da Silva from SIPRI: “On the one hand, supply chains were interrupted, which caused production costs to rise and delays. And then many countries decided on reconstruction packages after the pandemic, which led to higher inflation , which in turn has impacted arms sales.”

The consequences of the pandemic are dampening growth

The researchers believe that without the effects of the pandemic, the arms industry could have grown significantly more. According to SIPRI, states around the world have never spent as much money on the military as they will in 2021. However, it will still take a few years for the defense industry to be able to deliver at the usual pace again.

And even the war against Ukraine is partially slowing down production, even if many countries are ready to rearm. But the sanctions against Russia also cause delivery problems – because Russia is considered an important supplier of raw materials for weapons production. Da Silva explains that the rearmament plans of some countries in Europe or those of the United States could suffer in this way. “There are other potential suppliers of raw materials, like China or India. But that’s a political question, how that will develop. Whether Western countries can enter these markets and how China and India can use the demand for raw materials in Europe as leverage. “

The most important arms manufacturers come from the USA

In the ranking of the 100 largest defense industry corporations, US companies continue to occupy the top five places. However, the United States was the only region where arms sales fell in 2021 compared to the previous year – the reason for this is high inflation.

Almost every third company in the top 100 defense companies is based in Europe. In Germany, Rheinmetall is still the largest arms producer and ranks 31st in a global comparison. According to the SIPRI report, Rheinmetall had to accept pandemic-related losses in arms sales. The second largest German arms manufacturer ThyssenKrupp, on the other hand, was able to increase its sales by eleven percent according to SIPRI – thanks to the delivery of larger orders, for example for the German Navy.

Institute expects increasing sales figures

Overall, the market will continue to grow, believes analyst Diego Lopes da Silva from SIPRI. “Many European countries have announced increasing military spending of around $200 billion. Part of this is also intended for material procurement, so sales will continue to increase.”

SIPRI (Stockholm International Peace Research Institute) is an independent body that publishes annual reports on the arms industry, arms purchases, conflicts and arms exports. SIPRI is largely funded by the Swedish government and works closely with the United Nations and the European Union.