Home LATEST NEWS The armaments giants spared by the economic crisis of COVID-19

The armaments giants spared by the economic crisis of COVID-19

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The turnover of the 100 largest defense groups hit a new high of $ 531 billion in 2020, according to a report by the Stockholm International Peace Research Institute (Sipri) released on Monday. More than half of that was generated by American companies.

This represents a 1.3% increase over one year in their sales of arms and military services. During this time, the world economy fell by more than 3%, underlines the research organization based in Sweden, whose work makes reference in the matter.

On the rise since 2015

The turnover of the 100 largest armaments groups has been rising steadily since 2015, with a total increase of 17%, according to the Sipri.

Growth was weaker in 2020, however, than in 2019, when the top 100 saw sales jump 6.7%.

With the exception of Russian companies (-6.5% of sales) and French (-7.7%), the other main nations saw their large companies grow last year.

Five American giants once again monopolize the top of the world rankings. Lockheed-Martin (F-35 fighter jets, missiles …) consolidated its first place with arms sales of $ 58.2 billion, ahead of Raytheon Technologies, new No. 2 after a major merger. Boeing, Northrop Grumman and General Dynamics follow in order.

Briton BAE Systems is the first European (6th) with Airbus (11th). The Chinese Norinco (7th), Avic (8th) and CETC (9th), and the American L3Harris (10th) complete the top 10.

The request of governments

According to the institute, the good resistance of large companies to the difficult economic situation in 2020 is explained in particular by the budget support policies taken in the face of the pandemic and the effects of lockdowns.

The area has been largely protected by the continued demand from governments for military equipment, underlines the Sipri.

The armaments market, characterized by orders spread over several years, is also less sensitive to economic fluctuations.

But the defense industry has not been totally immune to COVID-19, especially on the industrial side. In many cases, measures taken to curb the virus have disrupted supply chains and delayed deliveries, note it Sipri.

The report thus cites the case of Thales, the leading French company – except Airbus – in the ranking (14th), which attributed to confinement the 6% drop in its turnover in 2020.

The supply logistics problems having multiplied in 2021, it is possible that these difficulties are reflected in their sales this year, as Lockheed Martin is planning, for example, Lucie Béraud-Sudreau, responsible for monitoring military spending at the Sipri.

Behind the 41 US companies in the top 100 and their share of 54%, 26 European companies captured 21% of total sales. China (13% of the total, with five companies) and Russia (5%, nine companies) follow.

When counting the European countries separately, China is the second country and the United Kingdom is the third (seven companies, 7.1%), ahead of Russia (nine companies, 5%) and France (six companies, 4, 7%).

China’s progress as a major arms producer has been driven by its desire to become more independent in its production and by ambitious modernization programs (of its armies).

A quote from Sipri

About fifteen other countries are home to companies appearing in the world top 100: Japan (5), Germany and South Korea (4), Israel and India (3), Italy (2) as well as Canada, Singapore, Turkey, Sweden, Poland, Spain, Ukraine and the United Arab Emirates (1).

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