Global arms and ammunition market size was valued at USD 62.25 billion in 2022 and is expected to reach USD 96.63 billion in 2030, with a CAGR of 5.65% for the forecast period between 2023 and 2030. In today’s contemporary era, characterized by expanding global economies and dwindling resources, nations fortify themselves to protect their interests, fostering peace internally and externally. They aim to secure their nations’ prosperity, survival, and continuity. The 2023 Global Peace Index, an annual publication from the Institute for Economics and Peace (IEP), reports a 0.42 percent decline in the average level of global peacefulness, marking the ninth consecutive year of deteriorating global peace.
The arms and ammunition market is experiencing significant growth due to rising global conflicts, resource constraints, and political instability. Security concerns drive this growth as nations strive to maintain sovereignty and peace. The industry is an economic driver, with imported arms often costing high and requiring licensing and permissions. Countries continuously enhance their capabilities, forging alliances, and invest in advanced technologies to create more durable and efficient weapons and ammunition. The market is not limited to lethal weaponry and includes non-lethal and non-tactical ammunition for crowd control and managing internal conflicts. Rising crime rates contribute to the market’s expansion.
Escalating Global Conflict Escalate Use of Arms and Ammunition
Geopolitical tensions have led to conflicts in various nations, with major powers seeking to extend their influence by supporting opposing factions through troop deployment and arms supply. The 2022 Global Peace Index shows a shift in the global conflict landscape, with major conflicts in the Middle East, North Africa, and South Asia decreasing and tensions increasing in sub-Saharan Africa, Europe, and Asia-Pacific. Since 2019, conflict intensity has increased, with a 45% increase in fatalities in the year preceding Russia’s invasion of Ukraine. It has led to a surge in demand for arms and ammunition, driven by geopolitical and economic reasons.
In 2022, Algeria procured arms, including recoilless rifles and grenade launchers from Bulgaria. North Africa, despite appearing stable, deals with underlying insecurity stemming from political, social, economic challenges, democratic deficits, extremist groups, and international rivalries. Algeria justifies its robust military posture due to its precarious neighborhood. It shares borders with unstable neighbors like Libya, which is affected by groups such as “Al-Qaeda in the Islamic Maghreb,” and Tunisia, marked by post-2011 political unrest. To the west, border tensions with Morocco are fueled by the Western Sahara conflict. Extensive frontiers with Mali and Niger, known for separatist and terrorist activities in the African Sahel, underscore the importance of military readiness.
Non-Lethal Ammunition Spurs the Market
Governments bear the responsibility of preserving internal peace and security. While protests are a natural part of global socio-political dynamics, they can sometimes escalate into violence. Unfortunately, the institutions meant to safeguard the populace might find themselves compelled to employ force against their citizens. In 2022, the Armed Conflict Location & Event Data Project noted a substantial increase in political violence amid reduced demonstration activity. This escalation was evident worldwide, particularly in Europe and Central Asia, with political violence surging by 27% compared to 2021 while demonstrations fell by 12%. Incidents of violence targeting civilians grew by 12%, becoming deadlier with a 16% increase in fatalities from direct civilian targeting.
Protests, driven primarily by economic grievances like inflation, have escalated significantly. In September 2022, Sri Lanka witnessed violent confrontations as authorities dispersed demonstrators protesting for several months due to severe economic challenges. Additionally, unjust actions could trigger civil unrest, exemplified by France’s deployment of over 40,000 police officers in July 2023 to quell urban riots following fatal police shooting incident. The growing trend has spurred a heightened demand for advanced riot control equipment, crowd dispersal tactics, rubber bullets, and tear gas, propelling the global arms and ammunition market.
Rising Civilian Arms Purchases Boost Arms and Ammunition Market
The 2023 Global Organized Crime Index shows a rise in global criminal activities, with an average rating of 5.03 out of 10, indicating 83% of the global population lives in countries with high crime rates. Despite this, resilience across various factors remains relatively stable. The arms and ammunition market is expanding due to a surge in civilian firearm acquisitions, driven by concerns about rising crime and personal safety. However, the increased accessibility of firearms raises potential risks, as they can be misused for violent purposes.
In the United States, the Second Amendment guarantees the right to hold arms, with 40% of adults living in households with firearms and 32% personally owning one. A significant portion of gun owners, 72%, cite protection and self-defense as major reasons for firearm ownership. The increase in gun accessibility coincides with a significant rise in gun violence in the USA in 2022, with over 600 mass shootings contributing to the highest firearm-related deaths in nearly three decades. Firearms manufacturers like Sturm, Ruger & Company, Inc. reported substantial earnings, with net sales of USD 593.3 million linked to their firearms operations.
Technology Breakthroughs Propel the Global Arms and Ammunition Industry Forward
Technological advancements propel the global arms and ammunition market, especially in small arms and rifles. Manufacturers are incorporating state-of-the-art optics and accessories, including night and thermal vision capabilities, to enhance the performance of these firearms. Concurrently, there’s a notable increase in the production of advanced, compact, and lightweight assault rifles designed for counter-terrorism operations and urban warfare, featuring quick target acquisition and reduced recoil. Additionally, adjustable stock systems are gaining popularity, enabling shooters to customize their rifles for comfort and precision in extended engagements. These innovations empower military forces and contribute to the industry’s sustained growth.
In June 2023, Israel entered a contract with Israel Weapon Industries (IWI) to procure an additional 2,800 Micro-Tavor assault rifles for the Israel Defense Forces (IDF) to be delivered by 2028. As Israel went to war with Hamas in October 2023, it initiated a fresh order for 10,000 rifles to equip civilian security teams primarily stationed in towns near Israel’s borders.
North America Maintains Market Leadership: Rising Defense Expenditures and Advanced Weapon Procurement Propel Dominance
North America maintains its market leadership. This dominance is primarily driven by the region’s escalating defense expenditures and the heightened acquisition of advanced weapons and ammunition by the United States and Canada. The United States has consistently been at the forefront of light weaponry, solidifying its position as a global military powerhouse. The United States Department of Defense (DoD) has significantly increased its investment in advanced weapon systems due to the evolving nature of warfare. Rigorous testing ensures reliability and assesses the performance enhancements associated with new integrated design changes.
In February 2023, the United States entered a USD 520 million contract with Northrop Grumman Corporation and Global Military Products to produce artillery ammunition for use by Ukraine. This underscores the region’s commitment to equipping its armed forces with cutting-edge weaponry.
Governments Regulations
Global regulations are essential for preserving domestic and international peace and security. They effectively curb conflicts, limit illicit arms trade, and prevent weapons from falling into the wrong hands, promoting stability and safeguarding human rights. International arms control agreements, like the Arms Trade Treaty (ATT) adopted in 2013 and enacted in 2014, govern the global transfer of conventional arms, including small arms and light weapons. The ATT addressed the transfer of small arms to non-state actors, such as armed groups and terrorist organizations. Other international agreements, like the Convention on Certain Conventional Weapons and the Convention on the Prevention and Combating of Terrorism, play significant roles in regulating the trade and use of small arms and armaments, promoting global peace and security.
In 2022, the United Nations General Assembly passed a resolution to comprehensively combat the illicit trafficking of small arms and light weapons. Member states were urged to strengthen their national laws and regulatory frameworks, increase collaboration with other nations, and support developing countries. In 2023, the European Union implemented a regulation to enhance firearms traceability and prevent their acquisition by criminal elements and terrorist organizations, thereby advancing security and public safety. These international frameworks collectively contribute to responsible arms trade, accountability, and the pursuit of global peace.
Impact of COVID-19
The arms and ammunition market has shown resilience despite the global economic downturn caused by the COVID-19 pandemic. Stockholm International Peace Research Institute (SIPRI) found a 1.3% increase in arms sales among the top 100 companies, indicating enduring demand driven by political and strategic motivations. Major arms manufacturers have used their financial influence to influence defense policies, sometimes accelerating orders to access funds ahead of schedule. The arms industry tapped into a growing South Asian market, with countries like India and China expanding their small arms production, catering to domestic and international exports. The resilience demonstrates the market’s adaptability to economic challenges and evolving geopolitical dynamics.
Impact of Russia-Ukraine War
Russia, a significant global arms supplier, saw its defense production capacity strained after its invasion of Ukraine in February 2022, along with subsequent sanctions that affected its arms industry’s reputation and complicated payment options for existing customers.
The conflict has heightened the demand for military equipment and ammunition in Europe. Global supply chain disruptions, such as shipping interruptions and semiconductor shortages, have impacted arms sales, particularly in Western countries with intricate global supply networks. Giving other countries opportunities to step in and fill the gap, for instance, since the war, Poland became a major supplier providing a significant share of major arms deliveries to Ukraine and NATO forces. Moreover, it has exposed contradictions in the global order, as business interests often trumped calls for peace, with certain EU member states continuing to export military equipment to Russia, amounting to 30 billion despite ongoing embargoes until 2021, according to Investigate Europe’s data analysis.
Global Arms and Ammunition Market: Report Scope
“Arms and Ammunition Market Assessment, Opportunities and Forecast, 2016-2030F” is a comprehensive report by Markets and Data, providing in-depth analysis and qualitative & quantitative assessment of the current state of the global arms and ammunition market, industry dynamics, and challenges. The report includes market size, segmental shares, growth trends, COVID-19 and Russia-Ukraine war impact, opportunities, and forecast between 2023 and 2030. Additionally, the report profiles the leading players in the industry, mentioning their respective market share, business model, competitive intelligence, etc.
Click here for full report- https://www.marketsandata.com/industry-reports/arms-and-ammunition-market
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