Major companies in the arms industry saw a 4.2 per cent increase in overall revenue in 2023 with sharp rises for producers based in Russia and the Middle East, a new report said Monday.

The report by the Stockholm International Peace Research Institute, or SIPRI, said revenues from the top 100 arms companies totalled USD 632 billion last year in response to surging demand related to the wars in Ukraine and Gaza.

It said that “smaller producers were more efficient at responding to new demand."

By contrast, some major companies such as US-based Lockheed Martin Corp. and RTX that were involved in complex, long-term contacts registered a drop in earnings.

The 41 US-based arms companies among the world's top 100 saw revenues of USD 317 billion, a 2.5 per cent increase from 2022, the report said.

Since 2018, the world's top five companies in the industry are Lockheed Martin Corp., RTX, Northrop Grumman Corp., Boeing and General Dynamics Corp.

Six arms companies based in the Middle East and in the world's top 100 saw their combined revenues grow by 18 per cent, to a total of USD 19.6 billion.

“With the outbreak of war in Gaza, the arms revenues of the three companies based in Israel in the top 100 reached USD 13.6 billion,” the highest figure ever recorded by Israeli companies in the SIPRI reports, the institute said.

The slowest revenue growth in 2023 was in the European arms industry, excluding Russia. Revenue totalled USD 133 billion or 0.2 per cent more than in 2022, as most producers were working on older, long-term contracts.

But smaller companies in Europe were able to quickly tap into the demand related to Russia's war against Ukraine.

Russia's top two arms companies saw their combined revenues increase by 40 per cent, to an estimated USD 25.5 billion.

“This was almost entirely due to the 49 per cent increase in arms revenues recorded by Rostec, a state-owned holding company controlling many arms producers,” the SIPRI report said.