Defence firms in the United States accounted for more than half of the $240 billion global sales of military equipment and services by the world’s top 100 arms groups in 2018.
Stockholm International Peace Research Institute (SIPRI), a Swedish-based institute made this known on Monday, noting that arms sales increased by 4.6 per cent compared with 2017 and 47 per cent since 2002, the year from which comparable data was first available.
According to SIPRI, for the first time since 2002, the top five spots in the Top 100 ranking are held exclusively by arms companies based in the United States: Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics. These five companies alone accounted for $148 billion and 35 per cent of total Top 100 arms sales in 2018. Total arms sales of US companies in the ranking amounted to $246 billion, equivalent to 59 per cent of all arms sales by the Top 100. This is an increase of 7.2 per cent compared with 2017.
A key development in the US arms industry in 2018 was the growing trend in consolidations among some of the largest arms producers. For example, two of the top five, Northrop Grumman and General Dynamics, made multibillion-dollar acquisitions in 2018.
‘US companies are preparing for the new arms modernization programme that was announced in 2017 by President Trump,’ says Aude Fleurant, Director of SIPRI’s Arms and Military Expenditure Programme. ‘Large US companies are merging to be able to produce the new generation of weapon systems and therefore be in a better position to win contracts from the US Government.’
Russian companies’ arms sales remain stable
The combined arms sales of the 10 Russian companies in the 2018 ranking were $36.2 billion—a marginal decrease of 0.4 per cent on 2017. Their share of total Top 100 arms sales fell from 9.7 per cent in 2017 to 8.6 per cent in 2018. This can be explained by the higher Top 100 total in 2018 due to the substantial growth in the combined arms sales of US and European companies.
Among the 10 Russian companies listed in the Top 100, the trends are mixed: five companies recorded an increase in arms sales, while the other five showed a decrease. Russia’s largest arms producer, Almaz-Antey, was the only Russian company ranked in the top 10 (at 9th position) and accounted for 27 per cent of the total arms sales of Russian companies in the Top 100. Almaz-Antey’s arms sales rose by 18 per cent in 2018, to $9.6 billion.
‘Arms sales by Almaz-Antey, the largest arms producer in Russia, continued to grow in 2018,’ says Alexandra Kuimova, Researcher for SIPRI’s Arms and Military Expenditure Programme. ‘This increase was due not only to strong domestic demand, but also to continued growth in sales to other countries, particularly of the S-400 air defence system.’
Arms sales increase for French companies but decrease for British and German companies
The combined arms sales of the 27 European companies in the Top 100 increased marginally in 2018, to $102 billion. Arms sales by companies based in the UK fell by 4.8 per cent, to $35.1 billion, but remained the highest in Europe. BAE Systems (ranked 6th) is the world’s largest arms producer outside of the USA. Its arms sales dropped by 5.2 per cent in 2018, to $21.2 billion.
‘Six of the eight UK-based companies listed in the Top 100 reported a reduction in arms sales in 2018,’ says Nan Tian, Researcher for SIPRI’s Arms and Military Expenditure Programme. ‘This was partly due to delays in the UK’s arms modernisation programme.’
The combined arms sales of French companies in the Top 100 were the second highest in Europe, at $23.2 billion. ‘The overall growth in arms sales of the six French companies in the SIPRI Top 100 was mainly the result of a 30 per cent increase in sales by combat aircraft producer Dassault Aviation,’ says Diego Lopes da Silva, Researcher for SIPRI’s Arms and Military Expenditure Programme.
The total combined sales of the four German arms-producing companies in the ranking fell by 3.8 per cent. ‘An increase in deliveries of military vehicles by Rheinmetall, the largest arms company based in Germany, were offset by a drop in sales by shipbuilder ThyssenKrupp,’ says Pieter D. Wezeman, Senior Researcher with SIPRI’s Arms and Military Expenditure Programme.
Other notable developments in the Top 100
Eighty of the 100 top arms producers in 2018 were based in the USA, Europe and Russia. Of the remaining 20, 6 were based in Japan, 3 in Israel, India and South Korea, respectively, 2 in Turkey and 1 each in Australia, Canada and Singapore.
The combined arms sales of the six Japanese companies remained relatively stable in 2018. At $9.9 billion, they accounted for 2.4 per cent of the Top 100 total.
The three Israeli companies’ arms sales of $8.7 billion accounted for 2.1 per cent of the Top 100 total. Elbit Systems, Israel Aerospace Industries and Rafael all increased their arms sales in 2018.
The combined arms sales of the three Indian arms companies listed in the Top 100 were $5.9 billion in 2018—a decrease of 6.9 per cent on 2017. The decline is mainly a result of Indian Ordnance Factory’s significant 27 per cent drop in arms sales.
The three companies based in South Korea had combined arms sales of $5.2 billion in 2018, equivalent to 1.2 per cent of the Top 100 total. Their collective arms sales in 2018 were 9.9 per cent higher than in 2017. Bucking the trend, however, was LIG Nex1, whose sales fell by 17 per cent in 2018. The shipbuilder DSME, which was ranked in 2017, dropped out of the Top 100 in 2018.
Arms sales by Turkish companies listed in the Top 100 increased by 22 per cent in 2018, to $2.8 billion. Turkey aims to develop and modernize its arms industry and Turkish companies continued to benefit from these efforts in 2018.
Created in 1966 by the Swedish parliament, SIPRI tracks military spending and arms transfers.