Arms manufacturers have never earned as much as they did in 2024. This is according to a report by the Stockholm International Peace Research Institute (SIPRI) on the 100 most important arms manufacturers worldwide. Their revenues from the sale of weapons and military services amounted to $679 billion (€582 billion) last year.
This represents an inflation-adjusted increase of 5.9% compared to 2023. Even then, increasing geopolitical tensions and, above all, the war in Ukraine had led to increased demand for arms. In 2024, this trend accelerated even further.
So is Russia’s war in Ukraine good for business elsewhere? “For the defense sector, for sure,” Nan Tian of SIPRI, one of the authors of the report, told DW. “In the last two years, the revenues have gone up substantially in these arms companies,” Tian said. This means developing new military equipment, restocking supplies and replacing equipment that has been destroyed.
German companies with particularly high growth rates
Of the 100 companies listed, 39 are based in the US, by far the leading country. These 39 companies account for just under half of global arms sales revenue. However, their growth rate of 3.8% is still relatively modest. The situation is different for the 26 European companies (excluding Russia). Taken together, they have seen a 13% increase in revenue.
German companies have been particularly successful, growing by as much as 36%. “It’s almost all linked to Russia’s invasion of Ukraine,” said Nan Tian. “There has been an increase in demand from the German armed forces. Whether it’s Rheinmetall or Diehl, building tanks, armored personnel carriers, ammunition, of course, for the German armed forces to replenish what they’ve sent to Ukraine as military aid, but also to expand their number of tanks, infantry fighting vehicles, etc.”
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Russia’s war economy thrives despite sanctions
Russia is listed separately in the SIPRI ranking. And it is not surprising that Russian arms manufacturers have seen significant growth. While Russia’s export revenues fell due to international sanctions, the sharp increase in domestic demand more than offset the losses.
But Russia is a special case, said Nan Tian of SIPRI. “The country has completely changed its priorities. The production has now, for the last three years, been geared to a war economy.” All resources have been channeled into the war, said Tian. According to the SIPRI report, Russia increased its production of 152mm artillery shells by 420% between 2022 and 2024: from 250,000 to 1.3 million.
Due to international sanctions, the Russian arms industry lacks parts from abroad, especially electronics for aircraft. However, the belief that the Russian economy would collapse as a result has proven to be false, said Nan Tian. “The country is far worse off now than it would have been if it hadn’t invaded (Ukraine), because of course there wouldn’t be sanctions, but the country has proven to be quite resilient to these various sanctions and economic issues.”
Nan Tian thinks that the transformation of the Russian economy has now gone so far that, if a lasting peace is achieved in Ukraine, it will be difficult for Russia to return to a non-war economy.
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Declining Chinese arms revenues due to corruption
Asia ranks third after the US and Europe, with 23 listed arms companies. But Asia is the only region where companies had lower revenues than in 2023. It was mainly Chinese companies whose revenues declined significantly — by 10%. No other country recorded such a decline according to the SIPRI report.
“This almost has nothing to do with the peacefulness of regions,” said Nan Tian. “Specifically, Asia and China, the reason for the decrease has been, there have been a lot of corruption allegations against Chinese arms companies,” he said, explaining that this had led to the cancellation or postponement of larger arms orders.
By contrast, companies from the Middle East recorded larger increases of 14%. Never before has this region been represented in the annual SIPRI statistics by so many companies: nine in total. Three are based in Israel, which has a particular demand for drones and air defense systems.
This region also includes Turkey, which once again has seen increased revenue. However, Baykar, the manufacturer of the Bayraktar combat and reconnaissance drone, failed to match its export figures to Ukraine from 2024.
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Top companies are based in the US
According to SIPRI, the five largest arms companies in the world are Lockheed Martin (which makes F35 fighter jets), RTX (formerly Raytheon Technologies, which makes aircraft engines and drones), Northrop Grumman (which produces long-range missiles), BAE Systems and General Dynamics (which makes nuclear submarines and guided missiles). With the exception of the British company BAE Systems, all are based in the US.
This is the first time since 2017 that a company not based in the US has appeared among the five largest arms manufacturers. By way of comparison, the military division of the European Airbus consortium ranks 13th among the 100 most important companies, while the German company Rheinmetall ranks 20th.
In 2024, four of these 100 companies were based in Germany: Rheinmetall, Thyssenkrupp, Hensoldt and Diehl. Together, they generated revenues of $14.9 billion. The war in Ukraine led to a large number of orders, especially from the manufacturer Diehl for their land-based defense systems.
The order of 155mm artillery shells for the Bundeswehr, the German Armed Forces, is the largest ammunition order in the company’s history. Rheinmetall was able to earn 47% more with tanks, armored vehicles and ammunition.
KNDS, the German-French alliance of tank manufacturers Krauss-Maffei, Wegmann and Nexter, ranks 42nd. This joint venture has also grown. At 40%, the number of orders rose significantly more than revenue, at 14%. Here, too, the war in Ukraine and the threat from Russia has ensured that orders are full.
This article was originally written in German.
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