Sales of arms and military services by the world's 100 largest arms companies totalled $632 billion in 2023, up 4.2 percent, according to a report by the Stockholm International Peace Research Institute (SIPRI).
Revenues had dipped in 2022 as global weapons makers struggled to meet the increase in demand, but many of them managed to increase production last year, the authors of the report noted.
In a sign of this surge in demand, all 100 companies tracked achieved sales in excess of $1 billion last year for the first time.
"There was a marked rise in arms revenues in 2023, and this is likely to continue in 2024," Lorenzo Scarazzato, a researcher with the SIPRI Military Expenditure and Arms Production, said in a statement.
Sales from the world's top 100 arms companies "still did not fully reflect the scale of demand, and many companies have launched recruitment drives, suggesting they are optimistic about future sales," Scarazzato added.
Smaller producers have been more effective in meeting the demand linked to the wars in Gaza and Ukraine, growing tensions in East Asia and rearmament programmes in other regions, the institute said.
"A lot of them specialise in either a component of something or build systems that require one set of supply chains," allowing them to react more quickly, Nan Tian, Director of SIPRI's Military Expenditure and Arms Production Programme, told AFP.
Among the leading producers, US companies recorded a 2.5 percent increase in their sales last year and still account for half the world's arms revenues, with 41 US weapons producers in the world's top 100.
Lockheed Martin and RTX (formerly Raytheon Technologies), the world's two largest arms makers, on the other hand, reported a fall in revenue of 1.6 percent and 1.3 percent respectively.
Such behemoths "often depend on complex, multi-tiered supply chains, which made them vulnerable to lingering supply chain challenges in 2023," Tian said.
- Russia's Rostec surges -
In Europe, home to 27 of the top 100, arms makers on average saw an increase of just 0.2 percent.
But European groups manufacturing complex weapons systems were still in the process of honouring old contracts last year, so the revenues do not reflect the influx of orders since then.
"At the same time, a number of other European producers saw their arms revenues grow substantially, driven by demand linked to the war in Ukraine, particularly for ammunition, artillery and air defence and land systems," SIPRI noted.
The figures for Russia, though incomplete, give a clear signal of an economy increasingly geared toward war.
Sales by the two Russian groups in the ranking rose by 40 percent, mainly thanks to a 49 percent increase in sales for state-owned conglomerate Rostec, according to the report.
Manufacturers in the Middle East were buoyed by the war in Ukraine and by the first months of the Israeli offensive in Gaza after Hamas's October 7, 2023 attack -- and saw on average an 18 percent lift in sales.
The three Israeli manufacturers in the ranking posted record sales of $13.6 billion, up 15 percent from the year before, while the three groups based in Turkey, such as drone producer Baykar, saw their sales jump by 24 percent -- boosted by Ukraine and Turkey's investments in its defence.
In Asia, the trend toward rearmament was particularly evident in the growth in sales by the four South Korean manufacturers, with revenues rising 39 percent on average, and five Japanese firms that saw an average increase of 35 percent.
The nine Chinese producers meanwhile saw revenue increase by only 0.7 percent "amid a slowing economy," but their sales still totalled $103 billion.
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