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In this article, we will be taking a look at the largest defense contractors in the world in 2022. To skip our detailed analysis, you can go directly to see the 5 largest defense contractors in the world in 2022.
The world seems to be heading towards a recession, despite being able to seemingly get over a global pandemic due to the early development of a vaccine which saved millions of lives. Inflation has reached recorded highs, and while you may think that most countries would be focused on their own economies and trying to ease the lives of the people living in them, geopolitical upheaval has made a mockery of this belief. In February 2022, Russia initiated an unprovoked invasion of Ukraine, which eight months later, is still no closer to an end with heavy losses to both sides, though the latter has definitely suffered the worst of it, with thousands of civilians dying and major infrastructure being destroyed by Russia. The West, to counter growing Russian threat, has united against it despite some disagreements, and supplied weapons and aid to Ukraine to be able to defend its territory. Regardless of who emerges victorious, the current geopolitical scenario bodes quite well for the defense contractor industry.
The defense industry is one of the few industries to have emerged largely unscathed from the pandemic and has continued to maintain modest growth in the US, while delivering significant growth in Europe, according to a report by PwC. According to the Stockholm International Peace Research Institute, global military spending set a new record of $2.1 trillion in 2021, and remember, this was before a major war which has led to significantly higher military spending in 2022 by most of the Western countries. While the industry wasn't majorly affected by the pandemic, it did face some issues especially due to worker absenteeism and supply chain shortages, after the global supply chain faced considerable challenges.
Before the Russian invasion, most military spending was to counter terrorism, especially in the United States and Europe. For other countries such as India and Pakistan, military spending is to ensure preparedness amidst rising tensions between the two countries, especially after India's Air Force transgressed Pakistani territory and was shot down by the Pakistan Army. Meanwhile, China has also continued to spend massively on its military, to establish its might even as relations with the West continue to deteriorate and skirmished with India, its neighbor, have taken place as well. China, along with the United States, dominates the list of the biggest defense contractors in the world.
Photo by Somchai Kongkamsri from Pexels
After Russia's invasion, priorities of Western nations have changed significantly, reverting more to Cold War style priorities; as an example, both Finland and Sweden have applied for NATO membership after the invasion despite threats by Russia. Meanwhile, the United States, realizing the importance of countering Russian aggression, has pledged at least $16.9 billion to Ukraine since January 2021, of which $16.2 billion have been provided after the invasion in February. The European Union member countries have also not held back, providing important weapons and aid to Ukraine, which is a major reason why it has been able to resist Russia's invasion to this extent so far, and this increase in defense spending is beneficial to the biggest defense contractors in the world in 2022.
According to the Business Research Company, the global defense market grew from $475 billion in 2021 to $514 billion in 2022, at a CAGR of 8.2%, aided by the Russia Ukraine war, and is expected to increase at a CAGR of 3.2% to $581 billion by 2026. To determine the biggest defense contractors in the world in 2022, we referred the Fortune 500 global list and the Fortune 500 list. We then ranked each defense company based on its revenues, profits, assets and number of employees, with 40% weightage being assigned to the first two criteria and 20% weightage being assigned to the last two. So, let's take a look at the companies most likely to benefit from the Russian invasion of Ukraine, starting with number 15:
15. Huntington Ingalls Industries, Inc. (NYSE:HII)
Total revenue (in millions of dollars): 9,524
Total profits (in millions of dollars): 544
Total assets (in millions of dollars): 10,627
Total number of employees: 44,000
Huntington Ingalls Industries, Inc. (NYSE:HII) is the biggest military shipbuilder company operating in the United States and also provides additional professional services in the defense sector. Responsible for more ships than any other shipbuilder in U.S. naval history, Huntington Ingalls Industries, Inc. (NYSE:HII) was launched in 2011 as a spin-off of another company in our list, Northrop Grumman.
14. Textron Inc. (NYSE:TXT)
Total revenue (in millions of dollars): 12,382
Total profits (in millions of dollars): 746
Total assets (in millions of dollars): 15,827
Total number of employees: 33,000
Textron Inc. (NYSE:TXT) was initially established as a textile company around a century ago but is now a major defense company in the United Staes. Textron Inc. (NYSE:TXT) has operations in at least 25 countries. Textron Inc.
13. L3Harris Technologies, Inc. (NYSE:LHX)
Total revenue (in millions of dollars): 17,814
Total profits (in millions of dollars): 1,846
Total assets (in millions of dollars): 34,709
Total number of employees: 47,000
L3Harris Technologies, Inc. (NYSE:LHX) was formed in 2019 through the merger of L3 Technologies and Harris Corporation. Among the products offered by L3Harris Technologies, Inc. (NYSE:LHX) are night vision equipment, wireless equipment, C6ISR systems and products, and surveillance solutions. While its revenues decline in 2021, L3Harris Technologies, Inc. (NYSE:LHX) has still managed to improve its operating income.
12. China South Industries Group
Total revenue (in millions of dollars): 44,374
Total profits (in millions of dollars): 737
Total assets (in millions of dollars): 61,762
Total number of employees: 162,498
China South Industries Group is the first of several state-owned Chinese defense companies. It is among the Chinese companies which were sanctioned by Donald Trump in November 2020.
11. General Dynamics Corporation (NYS:GD)
Total revenue (in millions of dollars): 38,469
Total profits (in millions of dollars): 3,257
Total assets (in millions of dollars): 50,073
Total number of employees: 103,100
According to the Stockholm International Peace Research Institute, General Dynamics Corporation (NYS:GD) was the fifth largest defense contractor in the world in 2020 by arm sales alone. While maintain operations in over 45 countries, General Dynamics Corporation (NYS:GD) currently has ten subsidiaries. General Dynamics Corporation (NYS:GD) is the supplier of several products in the defense segment including but not limited to combat vehicles, communication systems, nuclear-powered submarines, tanks and weapon systems.
10. The Boeing Company (NYSE:BA)
Total revenue (in millions of dollars): 62,286
Total profits (in millions of dollars): -4,202
Total assets (in millions of dollars): 138,522
Total number of employees: 142,000
One of two defense contractors more known globally for their commercial aircraft, The Boeing Company (NYSE:BA) is a major American corporation and the biggest exporter in the United States in terms of dollar value. The Boeing Company (NYSE:BA) is involved in the production of satellites, spacecraft, and military aircraft.
9. China Aerospace Science & Industry
Total revenue (in millions of dollars): 40,856
Total profits (in millions of dollars): -4,202
Total assets (in millions of dollars): 138,522
Total number of employees: 142,000
All of China's entries in the list of the biggest contractors in the world are state-owned companies engaged in the production of strategic and tactical missiles, in addition to ground investment. It is said to be the biggest producer of missiles in China.
8. Northrop Grumman Corporation (NYSE:NOC)
Total revenue (in millions of dollars): 35,667
Total profits (in millions of dollars): 7,005
Total assets (in millions of dollars): 42,579
Total number of employees: 88,000
Northrop Grumman Corporation (NYSE:NOC) is considered to be among the biggest weapons producers in the world, in addition to being a major military technology provider as well. Northrop Grumman Corporation (NYSE:NOC) has won the Collier Trophy 8 times. Northrop Grumman Corporation (NYSE:NOC) is known for producing the world's only known stealth bomber, which is now being replaced by the company's latest development, the B-21 raider.
7. China Aerospace Science & Technology
Total revenue (in millions of dollars): 43,420
Total profits (in millions of dollars): 3,099
Total assets (in millions of dollars): 95,825
Total number of employees: 180,521
While its primary dominance comes from being the main contractor for the Chinese space program, it is also engaged in the production of strategic and tactical missiles, as well as ground equipment.
6. China Electronics Technology Group
Total revenue (in millions of dollars): 55,457
Total profits (in millions of dollars): 2,152
Total assets (in millions of dollars): 85,806
Total number of employees: 202,561
The China Electronics Technology Group provides technological support to the Chinese military, including communication equipment, IT infrastructure, electronic equipment and software development.
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Disclosure: None. 15 largest defense contractors in the world in 2022 is originally published at Insider Monkey.
