Decline in Arms Sales Despite War in Ukraine

Lack of production capacity first led to lower incomes for the world’s largest arms suppliers last year, despite increased demand, reports show.

The war in Ukraine and attempts at increased defense purchases in a number of European countries were not enough to increase the income of the largest arms dealers in the world. According to an annual report from the peace institute Sipri in Stockholm, the 100 largest suppliers had a turnover of 597 billion dollars last year. That is 3.5 percent less than the previous year.

The sum corresponds to NOK 6,367 billion – or just under NOK 6.4 trillion – at today’s exchange rate.

– Many face obstacles

Russia’s full-scale invasion of Ukraine in February 2022 has – together with increased tension in several places in the world – led to a sharp growth in the demand for weapons and military equipment. But according to the Sipri report, the arms manufacturers do not have enough capacity to meet the increased demand.

– Many arms companies encounter obstacles when they try to adapt to production for high-intensity warfare, says Sipri’s head of armor research, Lucie Béraud-Sudreau.

At the same time, she points out that far more orders have come in, especially for ammunition, which will probably contribute to significantly increased income and profits in the coming years.

American and Russian companies contributed the most to the fall in turnover last year. Sipri points out that there is very limited access to figures from the Russian arms industry. The report therefore includes only two Russian companies, but they report a decrease of 12 per cent last year. In the USA, the overall decrease was 7.9 per cent.

Lonely Norwegian swallow

Kongsberg Gruppen is the only Norwegian company on the list. They moved up three places to number 83 last year. According to Sipri, the company’s income from arms sales increased by 12 per cent last year. Arms sales accounted for 37 per cent – just over a third of the group’s total revenue, according to the report.

The USA, China and Great Britain are at the top of the list of countries with the largest arms sales from the companies included in the report. Norway ends up in the bag item “Other countries”, which together account for less than 1 percent of the total sales from the world’s 100 largest arms suppliers.