Sales of Weapons by World's 100 Largest Companies Declined by 3.5% in 2022: Reasons Revealed

In 2022, sales by the world's 100 largest arms manufacturers reached $597 billion, reflecting a 3.5% decline compared to 2021, despite a sharp rise in demand. This is reported by the Stockholm International Peace Research Institute (SIPRI) in its latest report on global arms trade.

SIPRI experts explain that the decline is primarily due to a drop in revenues from major American companies. However, the backlog of orders and the growth in demand suggest that revenue from sales will significantly increase in the coming years.

The report also highlights that arms production is lagging behind the growth in demand amidst the conflict between Russia and Ukraine and rising geopolitical tensions, as manufacturers have struggled to sufficiently expand their capacities to cope with the increased volume.

Additionally, new orders were placed before the end of the year, which has caused the rise in demand not to be reflected in producers' revenues for 2022.

“Many arms production companies have found it challenging to adjust their production to high-intensity warfare,” said Lucy Berro-Sudron, director of SIPRI's Military Expenditure and Arms Production Programme. “However, new contracts have been signed, especially for ammunition, which is expected to lead to increased revenue in 2023 and beyond.”

In contrast to large American and European arms companies, manufacturers in Asia, the Middle East, and Oceania saw a notable increase in their revenues from arms sales in 2022, demonstrating a significant ability to swiftly respond to growing demand. This is particularly true in countries like Israel and South Korea, where production capacities are maintained in a responsive mode and where manufacturers aim for short supply chains.