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Annual report on weapons commerce reveals gross sales up 1.9 p.c, with Russia’s invasion of Ukraine including to provide chain issues.
Gross sales of arms and army companies by the world’s 100 largest defence firms rose 1.9 p.c to $592BN in 2021 regardless of provide chain points that held up shipments of crucial parts, in line with new information from the Stockholm Worldwide Peace Analysis Institute (SIPRI).
The rise, accelerating from 1.1 p.c in 2019-2020, marked the seventh consecutive yr of rising international arms gross sales, SIPRI mentioned in its Arms Business Database launched Monday.
SIPRI mentioned provide chain points continued to carry again commerce in 2021 and have been prone to worsen because of the Ukraine battle.
“We’d have anticipated even larger development in arms gross sales in 2021 with out persistent provide chain points,” Lucie Béraud-Sudreau, director of the SIPRI Navy Expenditure and Arms Manufacturing Programme, mentioned in an announcement. “Each bigger and smaller arms firms mentioned that their gross sales had been affected through the yr. Some firms, reminiscent of Airbus and Normal Dynamics, additionally reported labour shortages.”
Russia’s invasion of Ukraine in February 2022 was additionally rising provide chain challenges for arms firms around the globe, the SIPRI report mentioned.
For Western nations, it famous that Russia was a major provider of the uncooked supplies utilized in arms manufacturing.
“This might hamper ongoing efforts in the US and Europe to strengthen their armed forces and to replenish their stockpiles after sending billions of {dollars}’ value of ammunition and different tools to Ukraine,” it mentioned.
However Russia, which is rising manufacturing due to the battle, can also be affected due to war-related sanctions that make it tough for producers there to entry semiconductors and to obtain cost for his or her deliveries.
Corporations in the US dominated the listing with gross sales of the 40 US firms within the itemizing totalling $299bn in 2021, in line with SIPRI, though gross sales have been barely decrease in actual phrases because of excessive inflation.
Persevering with a sample established in 2018, the 5 corporations on the prime of the listing have been all based mostly within the US: Lockheed Martin, Raytheon Applied sciences, Boeing, Northrop Grumman and Normal Dynamics.
However the report famous a big surge in gross sales from Chinese language producers, with the eight Chinese language arms firms on the listing having complete arms gross sales of $109bn, a rise of 6.3 p.c from the yr earlier than. 4 of its producers have been within the High 10.
“There was a wave of consolidation within the Chinese language arms trade for the reason that mid 2010s,” Xiao Liang, a researcher with SIPRI, mentioned in an announcement. “In 2021 this noticed China’s CSSC changing into the largest army shipbuilder on the planet, with arms gross sales of $11.1bn, after a merger between two current firms.”
South Korean producers additionally noticed above-average development in gross sales, with the 4 firms in SIPRI’s listing reporting mixed gross sales 3.6 p.c above the earlier yr at $7.2bn, led by engine producer Hanwha Aerospace. Its gross sales surged 7.6 p.c to $2.6bn and are anticipated to develop considerably within the coming years after it signed a significant arms take care of Poland earlier this yr.
France’s Dassault Aviation Group additionally registered sturdy development, with gross sales up 59 p.c to $6.3bn in 2021, pushed by deliveries of 25 Rafale fight plane.
Elsewhere in Europe, nonetheless, firms struggled with provide chain disruptions, with most army aerospace corporations reporting losses.
There have been 27 firms with headquarters in Europe within the prime 100; their mixed arms gross sales elevated by 4.2 p.c to achieve $123bn.
The six Russian firms within the prime 100 noticed their gross sales rise by a marginal 0.4 p.c to $17.8bn.
“There have been indicators that stagnation was widespread throughout the Russian arms trade,” the report mentioned.
The SIPRI Arms Business Database was created in 1989.
The present model comprises information from 2002, and Chinese language firms have been included since 2015.
This yr’s replace famous that non-public fairness corporations seemed to be shopping for up extra arms firms, which might carry dangers for transparency as a result of they weren’t required to be as open about their funds as publicly-listed corporations.
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