Global arms sales on the rise as mililtary spending increases

Weapons sales grew 4.6% in 2018, dominated by US companies, says Stockholm International Peace Research Institute

A Lockheed Martin F-16 Block 60 Desert Falcon. Lockheed Martin is the largest arms producer in the world: in 2018 its share of total Top 100 arms sales was 11 per cent and its arms sales grew by 5.2 per cent. Bloomberg News
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The global arms industry is continuing to see growth with annual sales rising 4.6 per cent last year as US companies dominate the market, according to the latest report by a Swedish think-tank.

Sales of arms and military services by the industry's 100 biggest companies reached $420 billion (Dh1.54 trillion) in 2018, with an all-US line-up of Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics ranking in the top five for the first time since 2002, according to a report by Stockholm International Peace Research Institute (Sipri).

"The growth in Top 100 arms sales in 2018 can be correlated to increases in global military expenditure, particularly the rise in US spending from 2017 to 2018," the report said.

Global arms sales by the biggest 100 companies listed in Sipri's Arms Industry Database has jumped 47 per cent since 2002, when the current database was started. The database excludes Chinese companies due to the lack of reliable data.

The top five US arms companies made $148bn in revenue and accounted for 35 per cent of the sales of the top 100 arms companies, Sipri said in its report.

Total arms sales of all the 43 US companies in the ranking rose 7.2 per cent to $246bn in 2018. This share is equivalent to 59 per cent of all arms sales by value from the top 100 arms makers.

The US arms industry in 2018 saw a growing trend in consolidation among some of the largest arms producers as they sought to benefit from President Trump's push to overhaul the military.

"US companies are preparing for the new arms modernization programme that was announced in 2017 by President Trump,’ Aude Fleurant, director of Sipri's Arms and Military Expenditure Programme, said. "Large US companies are merging to be able to produce the new generation of weapon systems and therefore be in a better position to win contracts from the US Government."

Ten companies based in Russia were listed in the Top 100 in 2018. The total arms sales of Russian companies in the list was $36.2bn — a marginal decrease of 0.4 per cent on 2017.

Russia’s largest arms producer, Almaz-Antey, was the only Russian company ranked in the top 10 and accounted for 27 per cent of the total arms sales of Russian companies in the Top 100. Almaz-Antey’s arms sales rose by 18 per cent in 2018 to $9.6bn.

"This increase was due not only to strong domestic demand, but also to continued growth in sales to other countries, particularly of the S-400 air defence system," Alexandra Kuimova, researcher for Sipri’s Arms and Military Expenditure Programme, said.

The combined arms sales of the 27 European companies in the Top 100 increased marginally in 2018, to $102bn, dominated by the UK, according to the report.