Analysts: Despite the war in Ukraine, revenues of 100 global arms manufacturers declined in 2022

The total global revenue from the sale of arms and military services by the world's 100 largest companies in 2022 amounted to $597 billion, which is 3.5% less in real terms than in 2021, despite the fact that demand has increased sharply.

Source. This is stated in the report of the Stockholm International Peace Research Institute (SIPRI), BBC reports.

The decline was mainly due to a drop in revenues from arms sales by US manufacturers, while revenues from companies in Asia and the Middle East increased, the report said.

Russia's full-scale invasion of Ukraine and geopolitical tensions around the world contributed to a sharp increase in demand for arms and military equipment in 2022. However, despite receiving new orders, many US and European arms companies have been unable to significantly increase production capacity due to labor shortages, costs, and supply chain disruptions, which have only been exacerbated by the war in Ukraine.

"Many arms companies have had difficulty adapting production to high-intensity wars," says Lucie Bero-Sudro, director of SIPRI's Military Expenditure and Arms Production Program, "However, new contracts have been signed, particularly for ammunition, which should be expected to boost revenues in 2023 and beyond.

However, revenues from companies in Asia, Oceania and the Middle East grew significantly in 2022, demonstrating the ability to respond more quickly to rising demand, the report says. This applies to Israel and South Korea, as well as countries where companies tend to rely on short supply chains.

Revenues from arms sales of 42 US companies in the top 100 fell by 7.9% to $302 billion in 2022. They accounted for 51% of total arms sales revenue among the companies included in the ranking. Out of 42 US companies, 32 recorded a drop in revenues.

Revenues from arms sales by 26 of the top 100 companies based in Europe grew by only 0.9% in 2022, reaching $121 billion.

"The war in Ukraine has created a demand for equipment suitable for a war of attrition, such as ammunition and armored vehicles. Many European producers of these goods have seen their revenues rise," said Lorenzo Scarazzato, a research fellow at SIPRI's Military Expenditure and Arms Production Program. Among these producers are companies from Germany, Norway and Poland.

Background. As reported, the White House has created a map of the US states that earn the most money from the production of weapons for Ukraine.