The Global Arms Market Sets a Historic Record: Sales Surge to $679 Billion. Analysis of Dynamics, Key Companies, and Investment Trends.
The global defence industry is experiencing an unprecedented upturn. According to the Stockholm International Peace Research Institute (SIPRI), total revenue among the 100 largest arms manufacturers in 2024 increased by almost 6%, reaching a record $679 billion. Over the past decade, the volume of global arms sales has risen by 26%. Armed conflicts, geopolitical tensions, and a new arms race are driving this spiral of demand and profit for arms companies.
American Market Dominance
The United States maintains its undisputed leadership in the global military-industrial complex. Five of the six largest arms corporations in the world are American. These giants include Lockheed Martin, RTX (Raytheon Technologies), Northrop Grumman, General Dynamics, and Boeing. American companies account for approximately half of total global arms sales (projected at $334 billion in 2024).
The world's largest producer, Lockheed Martin, increased its revenue from military contracts by 3.2% to $64.7 billion, breaking a multi-year stagnation. Other U.S. leaders also increased their revenues for the first time since 2018.
It is worth highlighting SpaceX, led by Elon Musk, which has entered the list of the world’s top 100 defence contractors for the first time, doubling its revenue from military projects within a year (to $1.8 billion). SpaceX's appearance in the rankings underscores that even relatively new players with innovative solutions can swiftly carve out a significant niche amid increasing demand.
Europe Accelerates Defence Industry
The European military-industrial complex is showing the highest growth rates. In 2024, the combined revenue of 26 European companies listed by SIPRI (excluding Russia) grew by 13% to $151 billion, accounting for around 22% of the global arms market. European nations are ramping up weapons and technology production in response to the war in Ukraine and heightened threats from Russia. Of the 26 European companies, 23 increased their sales, with some achieving remarkable results:
- Rheinmetall (Germany) – defence revenue growth of 46.6% over the year due to demand for tanks, artillery, and munitions.
- Czechoslovak Group (Czech Republic) – a record growth of 193% (almost tripling to $3.6 billion) due to the production of approximately 1 million artillery shells for Ukraine under a Czech government initiative.
- JSC Ukrainian Defense Industry (Ukraine) – a 41% increase (to $3 billion) driven by mass production of weapons for the country's needs amid wartime conditions.
Russia's eastern European neighbours are also ramping up military-industrial capacities. Poland sharply increased its military budget (to 4.2% of GDP) and is investing in local production of military equipment and munitions. The European defence industry is experiencing a surge, though challenges lie ahead, ranging from supplier overload to shortages of certain materials.
Russia: Growth Despite Sanctions
The Russian defence industry is demonstrating steady growth despite sanctions pressure and restricted access to components. Two Russian companies – the state corporation Rostec (ranked 7th in the world) and the United Shipbuilding Corporation (ranked 41st) – are featured in SIPRI's rankings. By the end of 2024, their combined revenue rose by 23% to $31.2 billion. Notably, Rostec’s revenue from arms sales increased by 26.4%, reaching approximately $27 billion.
Western sanctions have not halted production, as explosive domestic demand has offset the decline in exports. Russian factories have significantly increased the production of munitions and equipment for military needs. For instance, the output of 152mm artillery shells in Russia in 2024 was increased fivefold compared to pre-crisis levels. As a result, Russia's military-industrial complex has maintained resilience, and following the stabilisation of the situation, it aims to return to global markets. The export intermediary Rosoboronexport has already formed a record backlog of overseas orders exceeding $60 billion, indicating a deferred demand for Russian weapons.
Asia: New Leaders and China's 'Pause'
The Asian arms market is experiencing mixed trends. On one hand, South Korea has emerged as a growth leader: four South Korean companies within the Top 100 increased their combined revenue by 31% (to $14.1 billion). Seoul is actively developing arms exports, securing multibillion-dollar contracts with European and Middle Eastern clients. For example, Hanwha Group increased its sales by 42% to $8 billion through the supply of self-propelled artillery and multiple rocket launchers both domestically and overseas.
Other Asian manufacturers are also gaining traction. India is advancing a policy of import substitution: three Indian companies listed by SIPRI saw a combined revenue increase of 8% to $7.5 billion, driven by government defence contracts. The industry in countries such as Pakistan, Indonesia, and Taiwan is developing, although their figures remain modest for now.
Conversely, an unexpected slowdown in growth in China – the second-largest arms market after the U.S. – has been noted. According to official SIPRI data, revenue from the eight largest Chinese arms companies decreased by 10% to $88 billion in 2024. Some giants, such as NORINCO, reported a one-third drop in sales amid anti-corruption investigations and delays in state orders in China. Nevertheless, experts assert that this 'pause' may be temporary: China continues its large-scale military modernization programme, and its actual expenditure on armaments is increasing. The statistical decline may be related to one-off factors, and in the coming years, the Chinese military-industrial complex may return to growth, strengthening competition in the market.
The Middle East Enters the Top Tier
Countries in the Middle East and surrounding regions are rapidly increasing arms production, displacing traditional suppliers in some markets. For the first time, SIPRI's rankings include nine companies from the Middle East, with a total revenue of around $31 billion (+14% year-on-year). Notably, Israel: three Israeli defence companies (including Elbit Systems and Israel Aerospace Industries) collectively increased sales by 16% to $16.2 billion. High demand for Israeli drones, air defence systems, and precision weapons remains strong despite geopolitical risks and criticisms of Israel's actions – customers worldwide continue to make purchases.
Turkey has strengthened its position as an exporter of drones, armoured vehicles, and missiles. Turkish companies (such as drone manufacturer Baykar) have received large orders from Ukraine, as well as from countries in Asia and Africa, increasing the export share to 95% in certain projects. The success of Turkey's defence industry is supported by active government backing and a focus on external markets.
The Persian Gulf is also emerging on the global stage. The United Arab Emirates has established a multi-faceted consortium, EDGE Group, which reported arms sales of $4.7 billion in 2024. Saudi Arabia, Qatar, and other oil-rich states are also investing billions of dollars in local production of drones, munitions, and military equipment, aiming to reduce dependence on imports and eventually become net exporters of arms.
Conclusions and Prospects for Investors
Record figures in the arms sector reflect a new reality: the world has entered an era of heightened military spending and rearmament. For investors, the defence sector has become one of the most dynamically growing segments. Shares of many arms companies have strengthened in the face of increased orders and government defence budgets. Major corporations are expanding production capacities, acquiring contractors, and preparing for years of robust demand.
In the short term, this trend is likely to continue. Ongoing conflicts and general geopolitical instability compel nations worldwide to spend more on security, which ensures that arms companies have filled order books. However, risks remain: shortages of skilled labour, disruptions in supply chains, and political export restrictions could impact project profitability. Nevertheless, from an investment perspective, the global military-industrial complex is currently experiencing an upsurge reminiscent of the Cold War era, and many market players are poised to take advantage of this opportunity.
