Asia outperforms US, Europe in arms sales revenue in 2022 as world becomes hungrier for weapons

The arms and military services sales revenue of the top 100 manufacturers in the world took a slight hit in 2022 since US companies performed poorly. On the other hand, companies based in Asia, Oceania and West Asia fared better with increased revenue. This was observed by the Stockholm International Peace Research Institute (SIPRI). The report, however, presented a positive outlook for arms manufacturers in future, predicting increase in revenue on account of outstanding orders and new contracts. According to the think tank, the global demand for arms and ammunition has increased, but production has trailed. The Ukraine-Russia war fueled the global demand for weapons, but US and European companies could not furnish enough. Why production lagged in US, Europe? “The arms revenues of the 42 US companies in the Top 100 fell by 7.9 per cent to $302 billion in 2022. They accounted for 51 per cent of the total arms revenue of the Top 100. Of the 42 US companies, 32 recorded a fall in year-on-year arms revenue, most commonly citing ongoing supply chain issues and labour shortages stemming from the Covid-19 pandemic,” SIPRI observed. - Labour shortage - Supply chain disruptions owing to the COVID-19 pandemic and then the Ukraine war - Increase in production costs Why Asia, Oceania, West Asian companies fared well? “The arms revenues of the 22 companies from Asia and Oceania listed in the ranking rose by 3.1 per cent to reach $134 billion in 2022. This was the second consecutive year where Top 100 arms revenues for Asia and Oceania were higher than those for Europe,” SIPRI report said. Companies based out of these regions of the world, according to SIPRI, showed their ability to ramp up production faster than European and US companies. - “Ever warm” manufacturing capabilities of companies in these countries, such as Israel and South Korea - These companies rely on shorter supply chains - Military modernisation in China, India, Japan and Taiwan: These modernisation drives were funded by respective governments “Domestic demand and reliance on local suppliers shielded Asian arms companies from supply chain disruptions in 2022,’ said Xiao Liang, a researcher with the SIPRI Military Expenditure and Arms Production Programme.