Defence demand: global arms orders continue to grow despite order backlogs
Kyiv • UNN
The FT reported a near-record order book for defense companies.
Order portfolios of the world's largest defense companies are approaching record levels due to growing geopolitical tensions, including in connection with Russia's war against Ukraine. This is reported by UNN with reference to The Financial Times.
Details
The analysis of 15 defense groups showed that at the end of 2022 - the last period for which full-year data is available for which full-year data is available, the total order backlog of these companies amounted to 777.6 billion dollars. But two years earlier, it amounted to $701.2 billion. dollars. According to the FT, the trend momentum continued in 2023: in the the first six months of this year, the total volume of unfinished orders of these companies amounted to $764 billion. This has increased the future portfolio of defense groups as governments continued to place orders.
According to the Stockholm International Peace Research Institute, total global military spending increased by 3.7 percent in real terms in 2022 to a new high of $2,240 billion.
Also. It is also reported that military spending in Europe over the past 30 years has shown the most rapid growth in the last 30 years. Governments in the region have announced new orders for ammunition and tanks to replenish national stocks depleted by donations sent to Ukraine.
According to the analysis of the FT analysis, Hanwha Aerospace recorded the largest growth in new orders, with a backlog which backlog grew from $2.4 billion in 2020 to $15.2 billion at the end of 2022.
Another German tank manufacturer Rheinmetall was another beneficiary of the increased spending: its order book grew from $14.8 billion in 2020 to $27.9 billion in 2022. According to the end of the first half of the year, its order book amounted to $32.5 billion.
Not all of the increase in of spending is not all related to Ukraine and its response to Russia's military aggression. For example, BAE Systems' order book grew from $61.8 billion to $70.8 billion in 2022, thanks to new orders for existing programs, including submarines, frigates and submarines, frigates and fighters. In the first six months of 2023, the order backlog orders reached a record $84.2 billion in the first six months of 2013.
According to Nick Cunningham, analyst at Agency Partners, the timeframe for decision-making, budgeting budgets and placing orders are quite long. He also noted that due to the with Russia's full-scale invasion of Ukraine, orders are currently being formed, this is not yet affecting revenues, "except for a few specialists with shorter with a shorter cycle, such as Rheinmetall".
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