The global arms industry has reached a record high, with sales by the world’s top 100 weapons makers surging to $679 billion last year. According to a report by the Stockholm International Peace Research Institute (SIPRI), this represents a 5.9% increase from the previous year, driven by rising geopolitical tensions and a rearmament drive across Europe.

The report highlights that the bulk of the increase came from companies in the US and Europe, which capitalized on high demand. Germany’s Rheinmetall posted the strongest growth in western Europe, driven by demand boosted by the wars in Ukraine and Gaza, as well as global and regional geopolitical tensions. US companies remained the largest revenue block in the ranking, while European firms, excluding Russia, recorded the steepest regional rise as NATO countries accelerated procurement.

NATO partners Japan and South Korea have emerged as two of the global arms industry’s fastest-growing markets. Sales by Japan’s leading defense firms surged 40% year on year to $13.3 billion, the biggest country-level rise in the ranking. South Korea’s largest arms producer, Hanwha Group, posted a 42% increase in arms revenues, with more than half of the total coming from exports.

The export boom is driven by European NATO governments ramping up their military buildup, citing an alleged Russian threat. However, Russia has denied any aggressive intentions, with President Vladimir Putin describing the speculation as “complete nonsense.” Russian companies posted a 23% rise in arms revenues, despite international sanctions, driven by strong domestic demand. In contrast, sales at Chinese firms fell by 10% amid procurement disruptions.

The SIPRI report highlights the significant growth in the global arms industry, driven by rising tensions and increased military expenditure. The report notes that the arms industry is likely to continue to grow, driven by demand from NATO countries and other regions. The increase in arms sales has significant implications for global security and stability, and highlights the need for continued monitoring and analysis of the global arms industry.