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The arms industry has had a good year. Only the 25 largest arms manufacturers had a turnover of 361 billion US dollars (about 300 billion euros) with sales of arms and military services last year. This corresponds to an annual growth of 8.5 percent. This is the conclusion reached by the Stockholm Sipri Peace Research Institute in a current study.
American companies dominated the market. In 2019, as in the previous year, the five largest defense companies were headquartered in the United States: Lockheed Martin, Boeing, Northrop Grumman, Raytheon, and General Dynamics. Only they sell weapons for 166,000 million dollars (about 137 million euros). Overall, the 25 largest arms companies included twelve US companies, which accounted for 61 percent of sales.
The largest manufacturers also include six Western European, four Chinese and two Russian companies. Sales of Chinese companies grew more slowly than the average of the top 25 overall. Russian corporations posted a drop. According to Sipri, one of the reasons the Russian government spent less money modernizing its fleets in 2019.
For the first time, a Middle Eastern company was among the largest arms sellers. EDGE, based in the United Arab Emirates (UAE), was founded in 2019 when more than 25 smaller companies merged. The company was responsible for 1.3 percent of the total arms sales of the 25 largest market participants in 2019, ranked 22nd in the Sipri ranking.
Arms companies maintain a network outside of their home countries: subsidiaries, joint ventures and their own research institutions, also in the poorest regions of the world. The states there wanted to advance the development of their own arms production through agreements with the companies, the Sipri researchers write. The poorest countries had “welcomed foreign arms companies to benefit from technology transfers.”
Five countries are responsible for nearly two-thirds of all arms spending
When it comes to expanding their global presence, European and American arms companies are ahead; Chinese and Russian producers, on the other hand, have only limited international infrastructure. Siemon Wezeman, the principal investigator for Sipri, suspects the reasons for the conflicts with other states. “Sanctions against Russian companies and government-imposed restrictions on acquisitions of Chinese companies appear to have played a role in limiting their global presence,” von Wezeman said in the report.
The states are the main customers of the arms industry. As Sipri showed in a previous study, nearly two trillion dollars (around 1.6 trillion euros) flowed into defense budgets in 2019. Almost two-thirds of this (1.2 trillion dollars / about 1 trillion euros) were invested only by the United States, China, India, Russia and Saudi Arabia.
The Sipri Institute is an independent international think tank based in Stockholm. The institute has been researching conflict, armaments and disarmament since 1966. It is largely funded by the Swedish government.
