Top 16 Defense Contractors in the World in 2023
In this article, we look at the top 16 defense contractors in the world in 2023. To skip our detailed analysis of the defense sector, you can head directly to the Top 5 Defense Contractors in the World in 2023.
Global military expenditure has grown by 19% since 2013 to reach a record high of $2,240 billion in 2022 – which accounts for 2.2% of the world’s gross domestic product (GDP). Much of last year’s defense spending was driven by Russia’s invasion of Ukraine, with Europe witnessing its steepest rise in the post-cold war era, with an increase of 13% compared to 2021. The Middle East experienced a growth of 3.2% on defense spending, as Saudi Arabia returned to the list of the world’s top five military spenders, having spent $75 billion that year. These staggering numbers were released by the Stockholm International Peace Research Institute (SIPRI) in its 2022 report.
Largest Defense Contractors
According to The Business Research Company, the global defense market has grown from $535 billion to $577 billion between 2022 and 2023 – a CAGR growth of 7.9%. The boom is likely to continue with the industry size expected to cross $700 billion by 2027. Some major beneficiaries of the surge in defense expenditures include companies like Raytheon Technologies Corporation (NYSE:RTX) whose operating profits increased by 9% between 2021 and 2022. Lockheed Martin Corporation (NYSE:LMT) was awarded contracts by the U.S. Department of Defense (DoD) worth $45.68 billion in 2022 – which made up for nearly 70% of its annual revenue.
The China North Industries Group Corporation Limited, and the Aviation Industry Corporation of China, also known as AVIC, are also among the prime contractors that profited from the increased spending in the previous year. China is the world’s second biggest military spender after the United States, and much of its armaments are sourced from industries at home. In 2022, Beijing spent an estimated $292 billion on defense expenditure, according to SIPRI.
In the United States, Lockheed Martin Corporation (NYSE:LMT) topped the charts as the largest federal defense contractor, having received over 11% of all spending by the DoD in 2022. This did not only include expenditure incurred on the U.S. military, but also contracts to aid the Ukrainian military against Russian advances. By December, the company had received missile orders worth $950 billion from Pentagon to refill stockpiles in Ukraine, with great focus on the production of HIMARS. These rocket launchers have proven instrumental in turning the tide in the conflict against Russia.
Lockheed Martin Corporation (NYSE:LMT) was followed by Raytheon Technologies Corporation (NYSE:RTX) at second spot, winning 6.1% of all defense-related contracts of the U.S. government. In September 2022, Raytheon Technologies Corporation (NYSE:RTX) was awarded a $985 million order from the U.S. Air Force to develop scramjet-powered hypersonic cruise missiles.
The Boeing Company (NYSE:BA) is another top contractor for the U.S. Department of Defense. In 2022, it received total orders from the DoD worth over $14.7 billion, which included a $2.21 billion contract for its KC-46A Pegasus aircrafts. General Dynamics Corporation (NYSE:GD) and Northrop Grumman Corporation (NYSE:NOC) claimed fourth and fifth positions, respectively, in the list of the top five defense contractors in the United States in terms of overall revenue in 2022. The US is also highly regarded for having the best defense industry in the world.
Since the advent of Russia’s invasion of Ukraine, priorities of the western world appear to have shifted from the global war on terror and now seem reminiscent of the Cold War era. Finland has joined NATO as its 31st member. Sweden has also applied for membership and is on the brink of receiving it. At least seven members are exceeding NATO’s defense expenditure goal of 2% of the GDP, with others taking urgent measures to increase their military spending and meet the target. You can read more about this in our article, NATO Military Spending by Country: Top 20 Countries.
Methodology
We have used two weighted metrics to rank the top 16 defense contractors in the world. These are 2022 annual revenues of firms that are in the defense industry, and the monetary value of the contracts they have received from the U.S. Department of Defense (DoD) during 2022. 30% of weightage was assigned to annual revenue, while 70% to DoD contracts. The United States is the biggest military spender in the world and accounts for nearly 40% of all defense expenditure globally.
It is also home to some of the largest aerospace and armaments manufacturing companies that meet modern military procurement needs of militaries around the world with new sophisticated weapons. Therefore, DoD contracts were assigned a greater weightage while creating this list than revenue volumes.
For information on DoD contracts, we have used data from USASpending.gov. There was no public data available on Chinese defense companies' contracts with their own or foreign governments. They have been highlighted as biggest contractors based on reports that link them to the People's Liberation Army (PLA). We have used their revenues as a proxy for their contractual magnitude.
Everett Historical / shutterstock.com
Here are the top 16 defense contractors in the world in 2023:
16. L3Harris Technologies, Inc. (NYSE:LHX)
2022 Revenue (millions of USD): $17,062
2022 DoD contracts (millions of USD): $5,978
L3Harris Technologies, Inc. (NYSE:LHX) was founded in 2019 after a merger between L3 Technologies and Harris Corporation. The company is headquartered in Melbourne, Florida, United States. It specializes in electronic warfare, surveillance solutions, and microwave weaponry. Their main products include C6ISR systems, wireless equipment, and night vision equipment. In December 2022, L3Harris Technologies, Inc. (NYSE:LHX) moved to acquire Aerojet Rocketdyne – a manufacturer of missile propulsion systems – for $4.7 billion.
15. GE Aerospace (NYSE:GE)
2022 Revenue (millions of USD): $26,050
2022 DoD contracts (millions of USD): $2,542
GE Aerospace, which is a subsidiary of the General Electric Company (NYSE:GE), recorded a growth of 22% in its revenue in 2022 compared to the previous year. Its operating profit also increased by a handsome 65%. Headquartered in Ohio, it is one of the leading aircraft engine suppliers in the world. In June this year, Lockheed Martin Corporation (NYSE:LMT) selected GE Aerospace (NYSE:GE) to supply engines for its LMXT strategic tanker used by the U.S. Air Force.
14. BAE Systems plc
2022 Revenue (millions of USD): $21,258
2022 DoD contracts (millions of USD): $5,062
British arms, security, and aerospace company BAE Systems plc is one of the largest defense contractors in Europe and is ranked as the seventh largest in the defense industry in terms of revenue by PwC. The company is headquartered in London and maintains presence in the United States as well, where it is among the largest suppliers to the U.S. Department of Defense. In 2022, the DoD awarded BAE Systems plc contracts worth $5 billion. This included a $599 million deal to support High Performance Computing Centers for the U.S. Army.
13. China Aerospace Science and Industry Corporation
2022 Revenue (millions of USD): $40,856
2022 DoD contracts (millions of USD): $ -
The China Aerospace Science and Industry Corporation (CASIC) is a state-owned enterprise headquartered in Beijing that specializes in the development of tactical missile systems, spacecraft, and launch vehicles. It is the largest manufacturer of missiles in China. The U.S. in 2020 placed a ban on American companies and individuals from investing in Chinese firms with ties to the People’s Liberation Army, which included CASIC.
12. China Aerospace Science and Technology Corporation
2022 Revenue (millions of USD): $43,419
2022 DoD contracts (millions of USD): $ -
The China Aerospace Science and Technology Corporation is China’s main contractor for its space program. It is a state-owned company that develops satellites, space launch vehicles, spacecrafts, and other defense and aerospace equipment.
11. China South Industries Group Corporation
2022 Revenue (millions of USD): $44,374
2022 DoD contracts (millions of USD): $ -
Another key state-owned Chinese organization on the list is the China South Industries Group Corporation. It is considered as the backbone of China’s national defense technology industry, and manufactures light weapons, advanced ammunition, anti-terrorism devices, and information optoelectronics that are used widely by all armed forces across the country.
10. China State Shipbuilding Corporation Limited
2022 Revenue (millions of USD): $53,670
2022 DoD contracts (millions of USD): $ -
Chinese shipbuilding conglomerate, the China State Shipbuilding Corporation Limited (CSSC), is one of the top 10 defense contractors in the world. It is also among the largest shipbuilding companies in the world. In 2022, the CSSC recorded a revenue of over $50 billion. The company builds ships for both naval and civil purposes. The Chinese Navy procures its warships and auxiliary vessels from the CSSC.
9. China Electronics Technology Group
2022 Revenue (millions of USD): $55,475
2022 DoD contracts (millions of USD): $ -
Established in 2002, the China Electronics Technology Group is a state-owned enterprise in China with over 150,000 employees. It is one of the major companies in China in the fields of defense and security electronics. Its main defense products include radars, integrated electronic information systems, and early warning systems among others. The company recorded a revenue of over $55 billion in 2022.
8. Airbus SE
2022 Revenue (millions of USD): $58,763
2022 DoD contracts (millions of USD): $ -
The European multinational aerospace corporation, Airbus SE, is next up on the list. The company maintains a division dedicated to the development of defense and space products, called Airbus Defense and Space. Airbus is the prime contractor for Europe’s Future Combat Air System (FCAS). The company also boasts a wide portfolio of products such as the Eurofighter Typhoon combat aircraft; the CN235, C295, and A400M airlifters; and the A330 multi-role tanker transport.
7. Northrop Grumman Corporation (NYSE:NOC)
2022 Revenue (millions of USD): $36,602
2022 DoD contracts (millions of USD): $13,361
Northrop Grumman Corporation (NYSE:NOC) reported an increase of 2.6% in its annual revenue, and 0.9% in its operating profit in 2022. The American multinational defense and aerospace company is one of the world’s largest armaments manufacturers. It ranks 113th on the list of Fortune 500 companies. Northrop Grumman Corporation (NYSE:NOC) is the manufacturer of the B-21 Raider, a strategic bomber currently under development for use by the U.S. Air Force.
6. Aviation Industry Corporation of China
2022 Revenue (millions of USD): $79,332
2022 DoD contracts (millions of USD): $ -
The Aviation Industry Corporation of China, or AVIC, is one of the biggest defense contractors in China. It is a state-owned company that has over a hundred subsidiaries. AVIC is the parent organization of Chengdu Aircraft Industry Group (CAIG), which has produced one of the most advanced weapons in China’s inventory – the J-20 fifth generation fighter jet to rival Lockheed Martin Corporation (NYSE:LMT)'s F-35. In addition, AVIC’s CAIG has also built the much-famed JF-17 Thunder in cooperation with Pakistan. The AVIC was in the news earlier this year for reportedly shipping $1.2 million worth of parts of the Su-35 fighter jets to Russia in October 2022 during the war in Ukraine.
Click to continue reading and see the Top 5 Defense Contractors in the World in 2023.
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Disclosure: None. Top 16 Defense Contractors in the World in 2023 is originally published on Insider Monkey.
