The world’s 100 arms manufacturers continued to increase sales in 2021, but supply chain issues have slowed the sector’s growth, according to a new report from the Stockholm International Peace Research Institute (SIPRI). .
Weaknesses caused by the COVID-19 pandemic contributed to curbing growth to 1.9% in 2021 to 2020, the report said on Monday. SIPRI pointed out that the war in Ukraine can be a problem for the industry in the near to medium term.
What the report indicated about Ukraine
Although the invasion of Russia and Ukraine and the reaction of the West have increased the demand for weapons, they have also left manufacturers facing challenges in finding raw materials and components.
SIPRI, an international institute that focuses on research on war, weapons, arms control and disarmament, said that Russia is a major supplier of raw materials used to build kill
“This could stop the ongoing efforts in the United States and Europe to strengthen their military forces and replenish their stockpiles after sending billions of dollars worth of ammunition and other equipment to Ukraine,” the report said.
Although Russian companies are expanding because of the war, SIPRI’s report said they are finding it difficult to access semiconductors. Companies are also influenced by war-related sanctions, for example in terms of receiving wages.
“Increasing output takes time,” said Diego Lopes da Silva, SIPRI’s principal researcher. “If the supply chain problems continue, it may take several years for some of the main weapons manufacturers to meet the new demands created by the Ukraine conflict.”
What happened in 2021
The report’s main focus is on industry models in 2021, which sees supply chain issues related to the pandemic appear to have slowed growth.
“We might have expected a higher growth in arms sales in 2021 without continuing supply chain issues,” said Lucie Beraud-Sudreau, director of SIPRI’s military spending and construction program. kill “Large arms companies and smaller companies reported that their sales fell during the year. Some companies, such as Airbus and General Dynamics, also reported a shortage of workers.”
Companies in the United States dominate the list of 100 weapons suppliers, with 40 companies there. They also took more than half of sales, $299 billion (€284 billion) out of a total of $592 billion. As of 2018, five of the top 100 companies are located in the United States.
North America was the only region that saw a decline in arms sales compared to 2020. The 0.8% decline in real terms was due to the strong growth of the US economy in 2021.
For 2021, 27 of the 100 arms suppliers are headquartered in Europe. The region saw arms sales increase by 4.2% to 2020, totaling $123 billion.
While it was a profitable year for shipbuilders, local aircraft manufacturers did not fare so well.
“Most of the European companies that specialize in military aerospace announced losses for 2021, which they blamed for supply chain disruptions,” said Lorenzo Scarazzato, a researcher with SIPRI. “In contrast, European shipbuilders appear to have been less affected by the pandemic and are likely to increase their sales in 2021.”
With arms sales of $4.5 billion, Rheinmetall remains (the 31st) largest arms company in Germany. However, its arms sales fell by 1.7% in 2021 due to the pandemic and supply chain disruptions.
The arms sales of the 21 companies in Asia and Oceania in the top 100 reached $136 billion in 2021 — a 5.8% increase over 2020. The eight Chinese arms companies in inventory reached $109 billion, an increase of 6.3%.
Among them is China’s CSSC, now the world’s largest shipbuilder, with arms sales of $11.1 billion, after a merger between the two companies.
The arms sales of the four Southeast Asian companies in the top 100 increased by 3.6% to 2020, reaching $7.2 billion. They included a 7.6% increase in sales for Hanwha’s cross-industry group, which is expected to grow after heavy military action against Poland following Russia’s invasion of Ukraine.
This is the first year that a Taiwanese firm, NCSIST, which specializes in military machinery and electronics, appears on the list – with arms sales of $2 billion.
Russia and the Middle East
Six Russian companies were included in the top 100 for 2021 with sales reaching $ 17.8 billion – an increase of 0.4% over 2020. SIPRI said, before the attack of Russia against Ukraine, a sign that sanctions are spreading widely across the Russian arms industry. .
The five companies based in the Middle East will make $15.0 billion in arms sales in 2021. This is a 6.5% increase to 2020, the fastest growth rate of all regions is predicted in the Top 100.
By: Sean Sinico