Global Arms Sales Rise For 7th Year Despite Supply Chain Issues

By Staff, Agencies

Sales of arms and military services by the world’s 100 biggest military companies rose 1.9 percent to $592BN in 2021 despite supply chain issues that held up shipments of critical components, according to new data from the Stockholm International Peace Research Institute [SIPRI].

The increase, accelerating from 1.1 percent in 2019-2020, marked the seventh consecutive year of rising global arms sales, SIPRI said in its Arms Industry Database released Monday.

SIPRI said supply chain issues continued to hold back trade in 2021 and were likely to get worse as a result of the Ukraine war.

“We might have expected even greater growth in arms sales in 2021 without persistent supply chain issues,” Lucie Béraud-Sudreau, director of the SIPRI Military Expenditure and Arms Production Program, said in a statement. “Both larger and smaller arms companies said that their sales had been affected during the year. Some companies, such as Airbus and General Dynamics, also reported labor shortages.”

Russia’s invasion of Ukraine in February 2022 was also increasing supply chain challenges for arms companies around the world, the SIPRI report said.

For Western countries, it noted that Russia was a significant supplier of the raw materials used in arms production.

But the country, which is increasing production because of the war, is also affected because of war-related sanctions that make it difficult for manufacturers there to access semiconductors and to receive payment for their deliveries.

Companies in the United States dominated the list with sales of the 40 US companies in the listing totaling $299bn in 2021, according to SIPRI, although sales were slightly lower in real terms as a result of high inflation.

Continuing a pattern established in 2018, the five firms at the top of the list were all based in the US: Lockheed Martin, Raytheon Technologies, Boeing, Northrop Grumman and General Dynamics.

The report, however, noted a large surge in sales from Chinese manufacturers, with the eight Chinese arms companies on the list having total arms sales of $109bn, an increase of 6.3 percent from the year before. Four of its manufacturers were in the Top 10.

South Korean manufacturers also saw above-average growth in sales, with the four companies in SIPRI’s list reporting combined sales 3.6 percent above the previous year at $7.2bn, led by engine manufacturer Hanwha Aerospace. Its sales surged 7.6 percent to $2.6bn and are expected to grow significantly in the coming years after it signed a major arms deal with Poland earlier this year.

France’s Dassault Aviation Group also registered strong growth, with sales up 59 percent to $6.3bn in 2021, driven by deliveries of 25 Rafale combat aircraft.

Elsewhere in Europe, however, companies struggled with supply chain disruptions, with most military aerospace firms reporting losses.

There were 27 companies with headquarters in Europe in the top 100; their combined arms sales increased by 4.2 percent to reach $123bn.

The six Russian companies in the top 100 saw their sales rise by a marginal 0.4 percent to $17.8bn.