Sales of arms and military services by the world’s 100 biggest defence companies rose 1.9 percent to $592BN in 2021 despite supply chain issues that held up shipments of critical components, according to new data from the Stockholm International Peace Research Institute (SIPRI).
The increase, accelerating from 1.1 percent in 2019-2020, marked the seventh consecutive year of rising global arms sales, SIPRI said in its Arms Industry Database released Monday.
SIPRI said supply chain issues continued to hold back trade in 2021 and were likely to get worse as a result of the Ukraine war.
“We might have expected even greater growth in arms sales in 2021 without persistent supply chain issues,” Lucie Béraud-Sudreau, director of the SIPRI Military Expenditure and Arms Production Programme, said in a statement. “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.”
Russia’s invasion of Ukraine in February 2022 was also increasing supply chain challenges for arms companies around the world, the SIPRI report said.
For Western countries, it noted that Russia was a significant supplier of the raw materials used in arms production.
“This could hamper ongoing efforts in the United States and Europe to strengthen their armed forces and to replenish their stockpiles after sending billions of dollars’ worth of ammunition and other equipment to Ukraine,” it said.
But Russia, which is increasing production because of the war, is also affected because of war-related sanctions that make it difficult for manufacturers there to access semiconductors and to receive payment for their deliveries.