The top 100 global defense firms made gains in 2021 despite ongoing supply chain disruptions, worker shortages and increasing prices of raw materials, according to a Defense News analysis published Monday.
U.S. defense firms Raytheon and Lockheed Martin both reported stagnant sales in 2021, as the rocky COVID-19 pandemic recovery, with its associated inflation and slow-moving supply chains, caused fears of a reduced federal defense budget and employee drop-offs after government-mandated vaccination requirements, Defense News reported. Nevertheless, defense-related revenues rose for the sixth year in a row.
“There may be another growth spurt [in defense spending] coming after this. That doesn’t even include the Europeans, who are definitely going to see a big increase,” Byron Callan of Capital Alpha Partners told Defense News.
Fiscal year 2021 revenue jumped 8% between 2020 and 2021, reaching $585 billion total for a group of top contractors dominated by U.S. and Chinese companies, according to Defense News. For comparison, the total was $551 billion in 2020, after the inclusion of Chinese companies, and $461 billion in 2010.
The 46 U.S. firms on the list made up 56% of the total revenue, while the seven Chinese companies represented all placed in the top 25% and accounted for $117 billion of the total. Combined defense revenues for companies belonging to NATO countries, excluding the U.S., came just under China at $110 billion.
The data does not include revenues posted in 2022, after Russia’s invasion of Ukraine, although Russian military spending ticked up as its army amassed on Ukraine’s border. (RELATED: US Shells Out Largest Ever Military Aid Package For Ukraine)
Western sanctions, intended to punish Russia with global economic isolation, could stifle Russian defense revenues in 2022, Daniel Gouré of the Lexington Institute told Defense News. “The guys who have bought mostly Russian stuff are now shifting,” he said, adding that the U.S. defense industry could grow as it attempts to keep an edge over Chinese and Russian competitors.
Only one Russian company responded to Defense News’ request for data despite a larger response rate in the past. The one that did, Tactical Missiles Corp., reported a 36% increase in revenues.
Data for the ranking was obtained via surveys the companies completed and submitted to Defense News independently.
Countries accelerated their defense spending for 2023 in the wake of an ongoing war between Russia and Ukraine, escalating tensions in the Taiwan Strait and smaller conflicts proliferating across the globe, Defense News reported.
In addition, critical material shortages continue to plague U.S. defense contractors as the Biden administration authorizes billions in weapons transfers to Ukraine, preventing U.S. firms from producing the munitions needed to replenish U.S. stocks, Defense News reported. In April, Raytheon said it could not manufacture Stinger missiles, of which the U.S. has donated over 1,400 to Ukraine as of June, according to Forbes, until at least 2023.
The Department of Defense, Raytheon and Lockheed did not immediately respond to the Daily Caller News Foundation’s requests for comment.
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