Sales of arms and military services by the sector’s largest 100 companies (excluding those in China) were up by 4.6% in 2018 compared to the previous year, totalling $420 billion, according to a new report by the Stockholm International Peace Research Institute (SIPRI).
The new data from SIPRI’s Arms Industry Database shows that sales of arms and military services by companies listed in the Top 100 have increased by 47 per cent since 2002 (the year from which comparable data is first available). The database excludes Chinese companies due to the lack of data to make a reliable estimate, SIPRI said on Monday.
For the first time since 2002, the top five spots in the 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% of total Top 100 arms sales in 2018. Total arms sales of US companies in the ranking amounted to $246 billion, equivalent to 59% of all arms sales by the Top 100. This is an increase of 7.2% compared with 2017, according to SIPRI data.
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,” said 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.”
The combined arms sales of the ten Russian companies in the 2018 ranking were $36.2 billion—a marginal decrease of 0.4% on 2017. Their share of total Top 100 arms sales fell from 9.7% in 2017 to 8.6% 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% of the total arms sales of Russian companies in the Top 100. Almaz-Antey’s arms sales rose by 18% in 2018, to $9.6 billion.
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%, 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% in 2018, to $21.2 billion.
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% increase in sales by combat aircraft producer Dassault Aviation,” said 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%. “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,” said Pieter D. Wezeman, Senior Researcher with SIPRI’s Arms and Military Expenditure Programme.
Eighty of the 100 top arms producers in 2018 were based in the USA, Europe and Russia. Of the remaining 20, six were based in Japan, three in Israel, India and South Korea, respectively, two in Turkey and one 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% of the Top 100 total.
The three Israeli companies’ arms sales of $8.7 billion accounted for 2.1% 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% on 2017. The decline is mainly a result of Indian Ordnance Factory’s significant 27% 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% of the Top 100 total. Their collective arms sales in 2018 were 9.9% higher than in 2017. Bucking the trend, however, was LIG Nex1, whose sales fell by 17% 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% 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.