World Military Industry: 2022 Turnover Falls by 3.5%
Stockholm SIPRI Institute: the US defense industry recorded a 7.9% decline in revenue last year due to labor shortages and rising production costs
In 2022, the turnover of the 100 largest military-industrial complex companies in the world decreased by 3.5% year on year, falling to $597 billion. This happened not because in a world, tormented by armed conflicts, the demand for weapons, ammunition, and military equipment is decreasing. On the contrary. Despite the growing demand for weapons, defense industry companies, primarily American, which recorded a 7.9% decline in revenue last year, were unable to meet it due to labor shortages and rising production costs.
This data was published by Stockholm International Peace Research Institute (SIPRI). The annual report entitled “SIPRI Yearbook 2023. Armaments, Disarmament and International Security,” emphasized that in 2022, “a decline was recorded, despite the increase in demand for weapons” resulting from the armed conflict between Russia and Ukraine.”
Of the 100 world’s largest companies analyzed by SIPRI experts, 42 are based in the USA, while 26 of the biggest names in the global defense industry are located in Europe, and they managed to absorb 20% of global investment in military spending in 2022. As a result, arms sales by European companies rose 9.6 percent last year.
According to the SIPRI report, “arms manufacturers in Germany, Norway, and Poland have benefited from rising demand.” In particular, the revenues of the German industrial group Rheinmetall grew by 13%, and the European aerospace consortium Airbus recorded a 17% increase.
The golden year for the military industry was 2022 for Turkey (+22%) and Israel (+6.5%). Company activity in Asia and Oceania also increased significantly, boosted by China, which has the second-largest share of international arms production after the USA, as well as India, Japan, and Taiwan, which “for the second year in a row collected revenues even higher than their European competitors.”
The development of China’s defense industry worries the United States, which announced the start of joint work with Australia in the field of hypersonic weapons in 2024.
As for the position of Russian companies in the defense-industrial sector, SIPRI experts concluded that in 2022, their turnover will decrease by 12%, but “this is not certain due to lack of transparency.”
For its part, on December 4, the Russian state arms export company Rosoboronexport reported that “in 2023, contracts worth $5.2 billion were concluded with African countries alone.” On the sidelines of the EDEX 2023 military exhibition in Egypt, Rosoboronexport CEO Alexander Mikheev said that Russian military sales to African countries “now account for more than 30% of all Russian arms exports.”