The sale of weapons is growing: Made in the USA, Leonardo is the first company in the European Union

The sale of weapons is growing: Made in the USA, Leonardo is the first company in the European Union

World arms sales continued to grow even in 2021, the year to be remembered, before the conflict broke out in Ukraine on February 24. The latest report published by the Stockholm International Peace Research Institute (Sipri) revealed in fact how the growth in the sale of arms and military services provided by 100 major industries in the sector in 2021 reached a record turnover of $ 592 billion and thus record. An increase of 1.9% in real terms compared to 2020. The growth trend that has now been occurring in the arms sector for seven consecutive years, despite the fact that Covid has brought many branches of the global industry to its knees.

supply problems
Even the “masters of arms” have not remained immune from the consequences of the restrictions imposed by the pandemic, since many companies in the war industry have been affected by the well-known supply chain disruptions, which in the era of the pandemic are often due to delays in deliveries and the lack of critical components. “If it weren’t for the ongoing supply chain problems, we would have seen a sharp increase in arms sales in 2021,” explains Lucy Péreaud-Soudrou, Program Director for Military Spending and Arms Production at Sipri, adding how some companies, such as Airbus, have also experienced shortages. Man power.

The impact of the Russian invasion of Ukraine
If Russia’s invasion of Ukraine signals a further increase in sales in 2022, then the conflict over Ukrainian territory may present a problem that is not easy to solve for the big arms world. Russia is in fact an important supplier of raw materials for the war industry, which could hinder efforts by the United States and Europe to supply weapons to Kyiv. On the other side of the front, Russia may also find itself in a difficult situation, as it is reported that Russian companies, in addition to suffering from the impact of Western sanctions, are facing many problems in purchasing semiconductors. “Increasing production takes time. If supply chain disruptions persist, it could take several years for some major arms manufacturers to meet the new demand created by the war in Ukraine,” explains Diego Lopez da Silva, senior researcher at SIPRI.

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The sphere is made in the USA
More than half of global sales go to US companies, with the 40 in the top 100 reporting a total of $299 billion in revenue, although Sipri reported a 0.8% drop in arms sales in real terms compared to 2020. The drop is partly due. This led to an increase in the rate of inflation in the US economy during 2021. Despite this, five US companies topped the ranking, led by Lockheed Martin (60.34 billion sales volume). British Bae Systems came in sixth place, followed by five Chinese companies.

Leonardo and Fincantieri get positions
On the other hand, the total arms sales of 27 companies included in the list of the 100 best companies in Europe increased by 4.2%. Thus, its turnover reached $123 billion in 2020. Sipri reveals that among these companies, most European companies specializing in the military aviation sector reported losses attributed to supply problems, while European shipbuilders seem to have been less affected by the repercussions of the pandemic and have been able to increase the size of its business.
Among the 27 European companies, in addition to the aforementioned British Bae systems, there are also Italian companies Leonardo and Fincantieri. In 2021 Leonardo overtook Airbus and took the twelfth place in the ranking (after the fourteenth place in 2020) and is thus the first representative of the European Union with arms sales of $13.87 billion or $2.71 billion compared to 2020. Arms sales and military services also accounted for 83 % of the total turnover of the Rome-based holding company that operates directly or through its subsidiaries in the aerospace and defence.
After the jump of Fincantieri, which moved from 54th to 48th place in 2020, the Trieste-based group climbed two more places in 2021 with $2.98 billion generated by arms sales out of a total turnover of 8.17 billion, accounting for 36%. of the total. sales.

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China and the Middle East race
However, the fastest growth was recorded in the East. Arms sales revenues for the 21 companies in Asia and Oceania in the ranking amounted to $136 billion in 2021, an increase of 5.8% over 2020. The increase is even more significant if we define ourselves for the eight Chinese companies that recorded a 6.3% increase in their sales, bringing their sales to From weapons to 109 billion dollars.
However, the fastest growth rate, which is 6.5%, was recorded by the five companies representing the Middle East, which sold weapons for a total of $ 15 billion, while the six Russian companies included in the rating recorded, for example, the minimum increase. by 0.4% compared to 2020. Therefore, the state of stagnation in arms sales, equivalent to $17.8 billion, in the year preceding what Vladimir Putin called a “special operation in Ukraine.”

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