Russia’s war against Ukraine, fighting in the Middle East and countless geopolitical conflicts: the demand for weapons is high. According to the SIPRI report, sales fell worldwide in 2022. Why is that?
Missile systems, fighter aircraft, ammunition: The war in Ukraine and geopolitical tensions worldwide have increased demand for armaments. This was not yet reflected in the arms sales of the world’s 100 largest arms producers last year. Overall, they even fell slightly by 3.5 percent, according to the peace research institute SIPRI in Stockholm. One reason: the aftermath of the corona pandemic.
“We see that companies are still experiencing supply chain issues and their sales and output are increasing much more slowly than expected,” says SIPRI director Dan Smith. “The weapons delivered to Ukraine came from existing inventory in 2022 and to a significant extent this year as well.”
Weapon systems do not come off the assembly line
In addition to slow supply chains, labor shortages and increased costs also impact production. Added to this is the fact that it requires a lot of effort to produce complex weapon systems.
“It takes a lot of time not only for development and design, but also for production. These complex weapon systems don’t just come off the assembly line. It’s a much slower process,” said the SIPRI director.
Rheinmetall in positive territory
Companies in the USA and Europe in particular are struggling with this, while South Korea, for example, has managed to ramp up weapons production much more quickly. Manufacturers of relatively simple military equipment, for example in the Middle East, would have benefited in particular. The largest German arms producer Rheinmetall was also able to increase its sales – by six percent.
The world’s largest arms company, the US company Lockheed Martin, suffered a decline of almost nine percent. Nevertheless, Smith suspects that the industry will soon be doing much better. The arms trade is a business that lasts many years from ordering to delivery. And the order books are full.
“I expect the top 100 to regain its footing in the next two years and sales to increase significantly in the remainder of the decade. Unless war and armed conflict in the world and geopolitical tensions subside.”
It’s not just the Ukraine war that’s driving demand
According to SIPRI director Smith, the war in Ukraine is the biggest driver of increased demand. But other factors also played a role.
“I think, besides Ukraine, the geopolitical security horizon and the relationship between the US and its allies with Russia and China respectively have the greatest influence on military spending and military production.”
The Stockholm Peace Research Institute SIPRI is an independent institution that publishes annual reports on the arms industry, arms purchases, conflicts and arms exports. SIPRI is largely financed by the Swedish government. The institute works closely with the United Nations and the European Union.
Julia Waschenbach, ARD Stockholm, tagesschau, December 3rd, 2023 2:37 p.m