Global Arms Industry Hits Record $679 Billion Revenue in 2024 Fueled by War

The world’s 100 largest arms manufacturers set a new revenue record last year. Their combined income from weapons and military services reached $679 billion in 2024. This represents a significant 5.9% increase from the previous year. The surge was directly driven by the wars in Ukraine and Gaza, alongside rising global military budgets.

According to a major report from the Stockholm International Peace Research Institute (SIPRI), this is the highest figure ever recorded. The data underscores how ongoing conflicts and geopolitical tensions are reshaping defense spending worldwide. The demand for artillery, drones, and other military hardware shows no signs of slowing.

European and US Firms Lead Unprecedented Surge in Military Spending

The bulk of the growth came from companies in Europe and the United States. In the U.S., 30 of the 39 firms in the top 100 posted higher revenues. Giants like Lockheed Martin and Northrop Grumman saw their combined income rise to $334 billion.

This surge comes despite reported delays and budget issues in major programs like the F-35 fighter jet. According to SIPRI, production challenges remain a persistent issue. Nonetheless, domestic and allied demand continues to fuel revenue growth for American defense contractors.

In Europe, the increase was even more pronounced. Twenty-three of the continent’s 26 ranked companies saw arms revenue climb. Their aggregate income jumped by 13% to $151 billion. This was primarily fueled by demand linked directly to the war in Ukraine and a renewed perceived threat from Russia.

Supply Chain Strains and Regional Shifts Reshape the Defense Landscape

The report highlights significant regional winners and emerging challenges. Firms in the Czech Republic and Ukraine saw explosive revenue growth. Meanwhile, European companies are investing heavily in new production capacity to meet demand.

SIPRI researcher Jade Guiberteau Ricard warned that sourcing critical materials could become a major hurdle. Restructuring supply chains for minerals is a key concern, especially with Chinese export restrictions. This could complicate future production timelines for Western manufacturers.

Despite international sanctions, Russia’s two major arms firms, Rostec and United Shipbuilding Corporation, saw a 23% revenue increase. Domestic demand has offset falling exports. In the Middle East, Israeli defense companies recorded a 16% rise to $16.2 billion, indicating continued international orders despite the Gaza conflict.

The global arms industry has reached a historic peak, with revenues hitting $679 billion in 2024. This record-breaking growth, detailed in the latest SIPRI report, is a direct consequence of protracted warfare and escalating national security budgets. The landscape suggests a sustained and challenging era for global defense production.

A quick knowledge drop for you

Q1: Which region saw the biggest percentage increase in arms revenue?

European companies, excluding Russia, saw the largest percentage jump. Their combined arms revenue increased by 13% in 2024, reaching $151 billion. This was largely driven by the war in Ukraine.

Q2: Did Russian arms companies suffer under sanctions?

Surprisingly, no. The two Russian firms in the top 100 saw combined revenue grow by 23%. Strong domestic demand from the military more than made up for a decline in exports caused by sanctions.

Q3: How did the Gaza war affect Israeli defense firms?

Israeli companies saw a 16% revenue increase. According to SIPRI, international backlash over Gaza had little immediate impact on new orders. Many countries continued to place contracts for Israeli weapons systems.

Q4: Why did Chinese arms revenue fall?

Revenue for the eight Chinese companies in the ranking dropped by 10%. This decline was led by major corruption allegations within China’s arms procurement system. The scandals caused significant contracts to be delayed or canceled last year.

Q5: What is the main challenge for arms producers now?

Sourcing critical materials is becoming a major challenge. Researchers note that restructuring supply chains for minerals is a potential complication. This is especially true given current geopolitical tensions and export restrictions.