US Companies Dominate Arms Sales Worldwide

On Monday, the Stockholm International Peace Research Institute (SIPRI) revealed that the United States once again hosted the highest number of arms companies ranked in the top 100, as the arms sales of the 41 U.S. companies accounted for 54 percent of world's top 100's total arms sales.

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Within the SIPRI Arms Industry Database, “Arms sales” are defined as sales of military goods and services to military customers domestically and abroad. All changes in those sales are expressed in real terms and all figures are given in constant 2020 U.S. dollars.

According to the SIPRI latest report on the global arms, U.S. companies continue to dominate the ranking. Together, the arms sales of the 41 U.S. companies amounted to US$285 billion, which meant an increase of 1.9 percent compared with 2019. And since 2018, the top five companies in the ranking have all been based in the United States.

“These U.S. companies accounted for 54 per cent of the Top 100’s total arms sales in 2020,” the SIPRI report pointed out, adding that the combined sales of 26 European-based companies amounted to US$109 billion.

The U.S. arms industry is undergoing a wave of mergers and acquisitions. To broaden their product portfolios and thus gain a competitive edge when bidding for contracts, many large U.S. arms companies are opting to merge or acquire promising ventures.

"This trend is particularly pronounced in the space sector. Northrop Grumman and KBR are among several companies to have acquired high-value firms specialized in space technology in recent years," said Alexandra Marksteiner, researcher with the SIPRI Military Expenditure and Arms Production Programme.

Globally, sales of arms and military services by the industry's 100 largest companies totalled US$531 billion in 2020, an increase of 1.3 percent in real terms compared with the previous year. And this number is 17 percent higher than in 2015, marking the sixth consecutive year of growth in arms sales by the top 100. The report also points out that the arms sales have increased even as the global economy contracted by 3.1 percent during the first year of the pandemic.

"The industry giants were largely shielded by sustained government demand for military goods and services. In much of the world, military spending grew and some governments even accelerated payments to the arms industry in order to mitigate the impact of the COVID-19 crisis," Marksteiner said.