The world of wars
New SIPRI ranking: Germany’s largest arms producers grew much faster than the global average in 2023. The West’s Asian allies against China also show rapid arms growth.
BERLIN (own report) – Germany’s biggest arms manufacturers achieved fast growth in 2023, significantly above the global average. This finding emerges from the latest ranking of the world’s hundred largest defence companies, published yesterday (Monday) by the Stockholm-based research institute SIPRI. Only four German companies – Rheinmetall, ThyssenKrupp, Hensoldt and Diehl – can claim a place in the SIPRI ranking. But this is due to the way Germany’s defence industry has a marked pattern of small and medium-sized enterprises, the renowned Mittelstand. However, the biggest four German companies were able to increase their revenues by 7.5 per cent last year, while global growth of the top hundred as a whole stood only at 4.2 per cent. Rheinmetall and Diehl in particular owe their growth surge largely to their role as suppliers in the Ukraine war. The SIPRI ranking again confirms that the largest US arms manufacturers are far ahead, generating massive revenues equal to around a half of the total global sales recorded for the top one hundred in 2023. The analysis also reveals the emergence of a powerful Turkish arms industry as well as a strong growth trend among the West’s Asian partners in an anti-China alliance. Here, weapons makers in South Korea and Japan are setting new records.
The top 100 arms producers
The new SIPRI report on the top one hundred arms-producing and military services companies in the world confirms another rise in revenues. Turnover of these big players increased in 2023 by 4.2 per cent, with total revenues amounting to 632 billion US dollars (USD).[1] US companies continue to dominate the global picture. In fact there are 41 of them in the top hundred, including the five largest of all. In 2023, they achieved combined sales of USD 317 billion. That constitutes a good 50 per cent of the combined global revenues of the 100 largest companies in the industry. The 27 European defence companies in the top 100 (USD 133 billion) and the 23 Asia-Pacific region companies (USD 136 billion) each accounted for around 21 per cent of total arms revenues. The largest arms manufacturers from Russia (USD 25.5 billion) and from the Middle East (USD 19.6 billion) are still a long way behind them. In regional terms, SIPRI identifies the strongest growth by far in Russia (40 per cent), due to the war in Ukraine, and the second strongest in the Middle East (18 per cent), due to the war in Gaza. The Stockholm-based researchers diagnose the lowest overall growth in Europe (0.2 per cent), but this has temporary causes.
Germany’s weapons boom
SIPRI expressly points out that the low growth of overall revenues recorded for European arms manufacturers in 2023 by no means indicates any reluctance to expand military-related output. It is just that Europe’s defence companies were very busy in 2023 working off complex orders, explains a SIPRI expert. The large number of new orders received were not yet reflected in the 2023 revenues picture.[2] A big leap must be expected in the coming years. Indeed, European defence companies will play a much bigger role in the global top one hundred in the coming years. As for Germany, it is already apparent that the revenues of the four German defence companies featured in the global top 100 have already skyrocketed. In 2023, bucking the much slower pan-European trend, average revenues to German arms companies rose by 7.5 per cent. The frontrunner in terms of revenue growth was Diehl. The company numbers only 83 in the global ranking, but it was able to increase sales by 30 per cent in response to expanding demand for ammunition and IRIS-T air defence systems. Rheinmetall, Germany’s largest defence company rose to 26th place and recorded 10 per cent sales growth. The fact that total revenues of the German companies in the top one hundred are relatively low, at USD 10.7 billion, is also due to the prevalence of small and medium-sized enterprises, the Mittelstand, in German manufacturing.
Wars in Gaza and Syria
The war in Ukraine is behind the increases in defence company revenues in Russia and, to some extent, in Europe, particularly in Germany. In the case of the Gaza war, the massive Israeli attack is reflected in a sharp rise in business for the three Israeli arms companies that claim a spot in the global top one hundred. According to SIPRI, aggregate revenues of Elbit Systems (ranked 27), Israel Aerospace Industries (ranked 34) and Rafael (ranked 42) rose 15 per cent to 13.6 billion US dollars – an all-time record. The growth of Turkish arms manufacturers is also very striking. While Turkey was only represented by a single company in the SIPRI top 100 for 2020, namely Aselsan, there are now three in the 2023 ranking, as Aselsan (ranked 54) is joined by drone specialist Baykar (ranked 69) and Turkish Aerospace Industries (TAI, ranked 78). SIPRI points out that their overall growth of 24 per cent on 2022 reflects Turkey’s long-term goal of becoming militarily independent of suppliers from the outside world. This in turn corresponds to Ankara’s striving for strategic autonomy, especially in relation to the West, and its role as a major regional power. Ankara is currently using this newfound strength to invade Syria.[3]
Arming against China
Last but not least, the SIPRI statistics reflect a rapid arms build-up among the West’s most important allies in the Asia-Pacific region. They are part of an alliance primarily directed against China. The revenues of the nine Chinese companies in the top 100 rose only slightly, by 0.7 per cent, to USD 103 billion. The 5.7 per cent revenue growth of arms makers in the Asia-Pacific region is largely down to two companies in two countries: the four South Korean companies in the top 100 (expanding by 39 per cent) and the five Japanese companies (by 35 per cent). While Japanese growth was mainly due to a big hike in domestic defence spending. Two years ago Tokyo launched Japan’s largest armaments programme in post-war history, while the growth of Korean corporations was strongly export-led, not least supplying customers in Europe. Poland, in particular, has been buying South Korean armaments, which are now beginning to rival imports from German companies.[4] India’s three arms companies in the SIPRI ranking also boosted their sales by as much as 5.8 per cent. Taiwan’s has only one producer in the top 100, NCSIST (ranked 47th), but it saw a huge 27 per cent increase in revenues based on orders for missiles, drones and radar systems.
[1] Lorenzo Scarazzato, Nan Tian, Diego Lopes da Silva, Xiao Liang, Katarina Djokic: The SIPRI Top 100 Arms-Producing and Military Services Companies, 2023. Solna, December 2024.
[2] World’s top arms producers see revenues rise on the back of wars and regional tensions. sipri.org 02.12.2024.
[3] See also: The Dwindling Eurocentric Perspective and Erdoğan in Berlin.
[4] See also: Blockbildung in Ostasien (II).
