US arms companies dominate list of 'Top 100' as sales grow for 7th straight year despite pandemic: SIPRI

Arms companies in the United States of America (USA) remained the largest military sellers in 2021 as the top 100 companies selling arms and military services posted a 1.9 per cent increase compared with 2020, touching $592 billion in 2021, in real terms. This, despite supply chain disruptions due to the COVID pandemic. The data was released by the Stockholm International Peace Research Institute (SIPRI). The trend in 2021 marked the seventh consecutive year that sales have grown— in 2020-21 it was higher than in 2019–20, at 1.1 per cent— though not as fast as the four years preceding the pandemic at 3.7 per cent. Arms sales grow despite supply chain disruptions The arms industry was massively affected by pandemic-related supply chain disruptions in 2021, chiefly delays in shipping and non-availability of vital components. “We might have expected even greater growth in arms sales in 2021 without persistent supply chain issues,” said Dr Lucie Béraud-Sudreau, Director of the SIPRI Military Expenditure and Arms Production Programme. “Both larger and smaller arms companies said that their sales had been affected during the year. Some companies, such as Airbus and General Dynamics, also reported labour shortages.” Ukraine War will further compound supply bottlenecks The Ukraine war, SIPRI report said, had added to the supply chain woes of the arms industry owing to two factors: Russia itself is one of the major arms and ammunition makers of the world; and, the US and Europe have been funnelling billions of dollars into Ukraine’s war efforts that has adversely affected their own efforts to embellish their armaments and stockpiles. “Increasing output takes time,” said Dr Diego Lopes da Silva, SIPRI Senior Researcher. “If supply chain disruptions continue, it may take several years for some of the main arms producers to meet the new demand created by the Ukraine war.” The SIPRI report cited how Russian companies were hampered by Ukraine war-related sanctions the difficulty in accessing semiconductors. US companies post biggest sales, but with a pinch According to the SIPRI report US-based companies—40 of the top 100—posted sales of $299 billion in 2021. The report attributed the decline of 0.8 per cent in real-terms to high inflation in the US economy during 2021. SIPRI cited that since 2018, the top five companies in the Top 100 have all been based in the USA. Meanwhile, SIPRI also cited a recent wave of mergers and acquisitions in the US arms industry which continued in 2021 and that the flip side of it was the government thinking to curb such M&A which would drive up procurement costs and product innovation since it would cut down competition in the market. Europe: Aerospace suffers, shipbuilding flourishes According to the SIPRI report, “In 2021 there were 27 Top 100 companies headquartered in Europe. Their combined arms sales increased by 4.2 per cent compared with 2020, reaching $123 billion.” “Most of the European companies that specialize in military aerospace reported losses for 2021, which they blamed on supply chain disruptions,” said Lorenzo Scarazzato, a researcher with the SIPRI Military Expenditure and Arms Production Programme. “In contrast, European shipbuilders seem to have been less affected by the pandemic fallout and were able to increase their sales in 2021.” According to the report, Dassault Aviation Group, the makers of Rafale fighter jets, turned out to be the trend-breaker in the military aerospace sector as it posted a sharp 59 per cent increase in sales to $6.3 billion in 2021, driven primarily by deliveries of 25 Rafale jets. 8 Chinese companies in Top 100 drive up figures in Asia According to SIPRI, “The combined arms sales of the 21 companies in Asia and Oceania included in the Top 100 reached $136 billion in 2021—5.8 per cent more than in 2020. The eight Chinese arms companies in the listing had total arms sales of $109 billion, a 6.3 per cent increase.” “In 2021 this saw China’s CSSC becoming the biggest military shipbuilder in the world, with arms sales of $11.1 billion, after a merger between two existing companies,” the report said. “The combined arms sales of the four South Korean companies in the Top 100 grew by 3.6 per cent compared with 2020, reaching $7.2 billion. This was largely due to a 7.6 per cent rise in arms sales by Hanwha Aerospace, to $2.6 billion.” In yet more major developments in the sector, the five Top 100 West Asia-based companies generated $15.0 billion in arms sales in 2021, a growth of 6.5 per cent over 2020, thus, becoming region that posted the fastest growth. On the contrary, the total arms sales of the four Top 100 companies based in Japan was $9.0 billion, a decline of 1.4 per cent over 2020. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.