Sales of arms and military services by the largest armsproducing companies—the SIPRI Top 100—continued to increase in 2010 to reach $411.1 billion, according to new data on international arms production released by the Stockholm International Peace Research Institute (SIPRI).

The total arms sales (including sales of military services) of the SIPRI Top 100 maintained their upward trend in 2010, although at 1 per cent in real terms, the increase was much slower than in 2009. Over the period since 2002, the increase has been 60 per cent in real terms.

Arms-producing and military services companies from North America and Western Europe once again dominated the list (which however does not include China-based companies). Sales by the 44 US-based companies accounted for over 60 per cent of all arms sales by the Top 100 arms-producing companies in 2010. The 29 companies based in Western Europe, accounted for another 30 per cent.

The global arms industry continues to be highly concentrated, with the top 10 arms-producing companies, accounting for 56 per cent, or $230 billion, of total Top 100 arms sales.

“The data for 2010 demonstrates, once again, the major players’ ability to continue selling arms and military services despite the financial crises currently affecting other industries,” states SIPRI arms industry expert Dr Susan Jackson. “To take one example, Oshkosh Corporation had a 156 per cent increase in arms sales in 2010 after winning the M-ATV (MRAP all-terrain vehicles) contract. In other cases, change is likely, not due to the financial crisis but rather because of the withdrawal of foreign troops from Iraq and the subsequent expected decrease in related equipment sales.”

The expanding military services market

Of the SIPRI Top 100 arms-producing companies, 78 are based in the United States and Western Europe. These companies generated $368 billion in total arms sales, which is 91.7 per cent of the total arms sales of the SIPRI Top 100 arms producers in 2009.

Data for 2010 shows a continuing increase in the sales of military services–including systems support, training, logistics, and maintenance, repair and overhaul–with 20 companies in the SIPRI Top 100 categorised primarily as military services providers.

Combined military sales for these companies rose from $22.3 billion in 2002 to $55 billion in 2010, a 147 per cent increase in real terms. Furthermore, as a result of outsourcing and changes in military technologies, such services will play a key role in company strategies for the foreseeable future.

In addition, a large number of other companies in the Top 100 that are not specialised military services companies also generate significant sales from military services. For example, in 2010 BAE Systems reported that 48 per cent of its total sales (or $15.8 billion) were generated in the services market.

Ten of the SIPRI Top 100 are based in Asia (3 in India, 4 in Japan, 1 in Singapore, 2 in South Korea), excluding China, and 5 in the Middle East (3 in Israel, 1 in Kuwait, 1 in Turkey). The SIPRI Top 100 companies in these two regions generated $24 billion in combined arms sales, which is 6 per cent of the SIPRI Top 100 arms sales in 2009.

Increased sales in 2010 illustrate how the arms industry is shielded from immediate, drastic financial threats.

The expansion and consolidation of the arms industry further strengthened the position of the Top 100 arms producers. Significantly, the entry point for inclusion in the Top 100 rose from $280 million in sales in 2002 to $640 million in 2010.

The SIPRI Top 100 list will appear in SIPRI Yearbook 2012 (published in June 2012), alongside full analysis of recent trends in arms production.