Global defense industry increases sales despite pandemic
The world's leading defense companies increased their sales last year despite the Corona pandemic. The 100 largest manufacturers turned over a total of $531 billion (470 billion euros) - an increase of 1.3 percent over the previous year, according to the Stockholm-based peace research institute Sipri.
US companies are by far the leaders, followed by arms companies from China. Criticism of the deals came from the Catholic aid organization Misereor.
Sales by the four German manufacturers on the list increased to $8.9 billion, according to Sipri, and their share of total sales by the 100 largest defense companies was 1.7 percent.
Despite a shrinking global economy and supply chain bottlenecks, the industry giants are "largely protected by continued government demand for military goods and services," said Alexandra Marksteiner, a Sipri expert on arms production. "Some governments have even increased their payments to the defense industry to mitigate the impact of the Covid 19 crisis."
U.S. companies continue to dominate the Sipri rankings in 2020. Revenues from arms sales by the 41 U.S. companies on the list totaled a combined $285 billion - an increase of 1.9 percent over 2019. U.S. arms manufacturers accounted for 54 percent of total arms sales in the top 100.
To remain a leader, the U.S. defense market is relying on mergers and acquisitions, according to the report. Companies also expanded their portfolios, according to the report. "This trend is particularly pronounced in the space sector," said Sipri expert Marksteiner.
Chinese firms, meanwhile, are emerging as some of the "most advanced military technology producers in the world," according to Nan Tian, senior researcher at Sipri. The five Chinese defense firms in the ranking accounted for 13 percent of total sales. That puts China well behind the U.S., but still ahead of the U.K., which ranks third.
According to Sipri, Chinese firms sold an estimated $66.8 billion worth of defense equipment - 1.5 percent more than the previous year. Chinese manufacturers have benefited in recent years from the country's military modernization programs and the merging of military and civilian projects, Nan Tian said.
European manufacturers, on the other hand, have had a mixed first Corona year. The 26 European defense companies together accounted for 21 percent of total arms sales ($109 billion).
Sales by British group BAE Systems - the only European company in the top 10 - rose 6.6 percent to $24 billion, according to the report. In contrast, sales by French companies slumped 7.7 percent.
The four German companies in Sipri's list of the 100 largest defense firms generated a 1.3 percent increase in sales, with Germany's largest arms manufacturer Rheinmetall reporting a 5.2 percent rise. Shipbuilder ThyssenKrupp, on the other hand, reported a 3.7 percent decline.
Russia's largest arms manufacturers faced a third consecutive year of declining sales. Sales balances for the nine ranked firms fell 6.5 percent to $26.4 billion, according to Sipri. The decline coincided with pandemic-related supply delays and the end of the government defense program, according to Sipri.
Overall, arms sales by companies in the top 100 based outside the U.S., China, Russia, and Europe totaled $43.1 billion - a 3.4 percent increase over 2019, representing 8.1 percent of total sales by the top 100 manufacturers.
Catholic charity Misereor criticized the arms deals. The report shows "once again" that "the states of this world set the wrong priorities in times of crisis," its chief executive, Pirmin Spiegel, told the Neue Osnabrücker Zeitung newspaper.
For many people, the Corona pandemic means the loss of their livelihoods. "At the same time, the arms industry is booming, and German manufacturers are also doing good business at the expense of people in conflict regions and at the expense of numerous victims of violence." The new German government must now "get serious about its announcements on export control and disarmament," he said.
For many people, the corona pandemic means the loss of their livelihoods. "At the same time, the arms industry is booming, and German manufacturers are also doing good business at the expense of people in conflict regions and at the expense of numerous victims of violence."