STOCKHOLM — World military spending climbed to a record $2.7 trillion in 2024 while arms sales by the top 100 defense contractors reached $679 billion, as a 17 percent surge in European military budgets pushed demand for weapons to new highs, according to data compiled by the Stockholm International Peace Research Institute and recent news reports. The boom is being driven by protracted wars in Ukraine and Gaza, rising tensions with Russia and China, and a wave of rearmament pledges that are locking governments into higher long-term budgets, Dec. 11, 2025.
Defense contractors cash in on decade of rising budgets
Global military expenditure has now risen for ten straight years, increasing by 37 percent between 2015 and 2024 and lifting the world’s military burden to 2.5 percent of global gross domestic product, according to the latest SIPRI fact sheet on 2024 military expenditure. The steep 9.4 percent jump in 2024 alone — the fastest annual rise since at least the late 1980s — was led by Europe and the Middle East as governments scrambled to refill depleted stockpiles and harden their forces against perceived threats from Moscow and Tehran.
At the company level, defense contractors turned those budgets into record revenue. In 2024 the world’s 100 largest arms and military services firms booked a combined $679 billion in arms revenues, up 5.9 percent from the previous year and the highest level recorded since SIPRI began tracking the sector. A December press release on the SIPRI Top 100 arms producers shows U.S. companies still dominating with an estimated $334 billion in arms revenues, while European firms’ sales jumped 13 percent to $151 billion as their factories ramped up production of artillery shells, air-defense systems and armored vehicles.
A recent Reuters analysis of global military spending underscores how closely the boom for defense contractors tracks geopolitical flashpoints: the war in Ukraine, Israel’s campaign in Gaza and growing rivalry in the Indo-Pacific have all triggered multi-year procurement plans, particularly among NATO allies.
Europe’s 17 percent spending surge redraws the arms map
Europe has become the sharpest edge of this trend. SIPRI estimates that European military spending, including Russia, rose 17 percent in 2024 to around $693 billion, pushing the region’s budgets above late–Cold War levels as governments race to acquire air defenses, long-range fires and ammunition. For defense contractors, that has translated into surging orders: European producers in the Top 100 reported double-digit revenue growth, led by Czech manufacturer Czechoslovak Group and Ukraine’s state-owned JSC Ukrainian Defense Industry, which both posted some of the fastest gains worldwide.
Analysts say the rearmament cycle is unlikely to end soon. Many European states have written higher defense targets — often above 2 percent of GDP — into law, effectively guaranteeing a medium-term pipeline of work for regional and U.S. defense contractors. But SIPRI researchers also warn that shortages of critical minerals and the need to restructure supply chains away from Russia and China could drive costs higher and slow delivery schedules, even as order books stay full.
From post-Cold War retrenchment to a new boom for defense contractors
The current boom marks a stark reversal from the years after the global financial crisis, when governments tightened belts and some defense contractors worried about a permanent slowdown. The 2012 chapter on arms production in the SIPRI Yearbook noted that Top 100 arms sales in 2010 totaled about $411 billion, after growing roughly 60 percent in real terms between 2002 and 2010 but facing fresh uncertainty as Western austerity measures took hold.
By 2015, that chill was clear in the numbers: the 2015 SIPRI Top 100 fact sheet recorded arms sales of $370.7 billion, a 0.6 percent decline from 2014 and the fifth consecutive year of real-terms contraction. A decade later, with global arms revenues nearly doubled and military spending at $2.7 trillion, the pendulum has swung decisively in favor of defense contractors — even as governments confront the trade-offs of funneling more public money into weapons instead of schools, health systems or climate resilience.
For now, industry executives and investors see few signs of demand easing. The question hanging over the boom is whether stretched supply chains, political backlash over arms exports and concerns about long-term fiscal sustainability will eventually force a reckoning — or whether defense contractors will continue to thrive in a world that appears to be arming for a more dangerous era.
