The world's top 100 arms manufacturers reported revenues of $632 billion in 2023, marking a 4.2-percent increase from the previous year, according to figures released by a global think tank on Monday.

The surge in military sales was largely driven by ongoing conflicts in Ukraine and Gaza, as well as mounting tensions in Asia, according to the Stockholm International Peace Research Institute, or SIPRI.

While production challenges caused a temporary dip in 2022, manufacturers increased output last year to meet soaring demand, the report said.

Highlighting the unprecedented demand, all tracked companies exceeded the $1 billion sales threshold for the first time in the industry's history, the report said.

"There was a marked rise in arms revenues in 2023, and this is likely to continue in 2024," said Lorenzo Scarazzato, a researcher with the SIPRI Military Expenditure and Arms Production Program. "The arms revenues of the top 100 arms producers still did not fully reflect the scale of demand, and many companies have launched recruitment drives, suggesting they are optimistic about future sales."

Among the 41 United States-based companies in the top 100, 30 increased their arms revenues, collectively reaching $317 billion and representing half of total global sales. However, industry leaders Lockheed Martin and RTX were among the minority that saw declining revenues.

Nan Tian, director of SIPRI's Military Expenditure and Arms Production Program, stated that industry giants such as Lockheed Martin and RTX rely on "complex, multi-tiered supply chains, which made them vulnerable to lingering supply chain challenges in 2023".

The institute reported that smaller manufacturers have shown greater agility in responding to demand driven by the conflicts in Gaza and Ukraine, the escalating tensions in East Asia, and military rearmament programs across various regions.

Smaller producers "specialize in either a component of something or build systems that require one set of supply chains", allowing them to react more quickly, said Tian.

European arms manufacturers, representing 27 of the top 100 companies, overall posted growth of only 0.2 percent as they focused on fulfilling existing contracts, with the recent surge in orders yet to be reflected in their revenues.

At the same time, several European manufacturers experienced significant revenue growth, fueled by demand related to the Russia-Ukraine conflict, especially in ammunition, artillery, air defense systems, and ground equipment.

Figures for Russian arms manufacturers showed dramatic growth, with two listed companies increasing sales by 40 percent, led by state-owned Rostec's 49-percent surge, signaling an increasingly militarized economy.

Middle Eastern and Asian producers reported substantial gains, with Israeli companies reaching record sales of $13.6 billion, Turkish companies up 24 percent, South Korean manufacturers rising 39 percent, and Japanese enterprises increasing by 35 percent. Middle Eastern manufacturers overall saw an 18-percent increase in revenues.

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