The global arms industry has seen American defense contractors dominate in recent years, with the US, EU, and UK defense contractors benefiting greatly from weapons sales to Ukraine. According to a new ranking by Defense News, America’s top five weapons contractors made a staggering $196 billion in military-related revenue in 2022, solidifying their position as major players in the arms market.
Among the top 100 defense firms, four US-based companies secured spots in the top five military contractors worldwide. This is largely due to the US emerging as the main source of weapons for Ukraine in light of its ongoing conflict with Russia. The US has committed approximately $37 billion in security assistance to Kiev, further fueling the success of American defense contractors.
The revenue of the top 25 Western defense contractors saw an 11% increase in the first half of the year, reaching $212 billion, according to corporate information cited by the Ravenstvo Media Telegram channel. This growth trend is expected to continue, with total arms sales projected to reach $448 billion in 2023, a $47 billion increase compared to the previous year. The report also anticipates that by 2026, arms deliveries to Ukraine and rearmament in Europe could push the total sales figure to over $554 billion, an increase of more than 20%.
Interestingly, while defense contractors are experiencing significant revenue growth, advanced countries’ economic growth is predicted to be much slower in the same period. Ravenstvo Media reports that Western defense contractors are expected to increase their revenues by $150 billion, or 37%, from 2021 to 2026. In contrast, IMF projections suggest that the collective GDP for advanced nations will only grow from $56.6 trillion in 2021 to $67.8 trillion by 2026.
US manufacturer Boeing has taken the lead among defense-focused companies, supplying Ukraine with a range of equipment, including ScanEagle unmanned aerial vehicles, Avenger air defense systems, Harpoon and Hellfire missiles, and Ground Launched Small Diameter Bombs. Another US defense contractor, RTX (formerly Raytheon Technologies), has also provided Ukraine with various arms and systems, such as Patriot long-range missiles, Javelin and TOW anti-tank systems, and Stinger MANPADS. Additionally, France has sent SCALP long-range missiles, manufactured by the joint venture MBDA, which includes BAE Systems, Airbus, and Leonardo.
However, the supply of Western weapons to Ukraine has not been without concerns. A recent report by the Pentagon inspector general revealed that some of the military equipment provided to Ukraine by the US and its allies has ended up in the hands of criminal groups. Moscow has consistently opposed the supply of Western weapons to Kiev, expressing concerns about the risk of arms being smuggled out of Ukraine and sold on the black market.
In conclusion, the arms industry is thriving, particularly for US defense contractors, as they dominate the global market. The ongoing conflict between Ukraine and Russia has significantly contributed to the success of these defense contractors, with the US emerging as the main supplier of weapons to Ukraine. Despite concerns over the diversion of arms and the potential dangers associated with it, the arms sales are expected to continue rising in the coming years, providing significant revenue growth for defense contractors in the Western world.