US arms exports hit document in 2024 on Ukraine-related demand

By Mike Stone

(Reuters) – U.S. army tools gross sales to overseas governments in 2024 surged 29% to a document $318.7 billion, the State Division mentioned on Friday, as international locations sought to replenish shares despatched to Ukraine and put together for main conflicts.

The figures from the Biden administration’s ultimate 12 months underpin expectations of stronger gross sales for U.S. weapons makers like Lockheed Martin (NYSE:LMT), Basic Dynamics (NYSE:GD) and Northrop Grumman (NYSE:NOC), whose shares are forecast to climb amid rising world instability.

Throughout his presidential marketing campaign, Republican Donald Trump mentioned allies ought to spend extra on their very own defenses. Trump desires different members of NATO to spend 5% of their gross home product on protection – an enormous enhance from the present 2% objective and a stage that no NATO nation, together with america, at the moment reaches.

Protection contractors are straining to satisfy the surge of demand that has mushroomed on account of Russia’s invasion of Ukraine. International ministries of protection have been lining as much as submit orders to spice up their inventories, whereas the U.S. is searching for to replenish stockpiles of weaponry and munitions despatched to Kyiv.

Arms gross sales and transfers are seen as “essential U.S. overseas coverage instruments with potential long-term implications for regional and world safety,” the State Division mentioned in an announcement.

Gross sales accepted in 2024 included $23 billion price of F-16 jets and upgrades to Turkey, $18.8 billion price of F-15 fighter jets to Israel, and $2.5 billion price of M1A2 Abrams tanks to Romania.

Orders accepted in 2024 usually go into the order backlog for U.S. weapons makers, which expect that orders for a whole bunch of hundreds of artillery rounds, a whole bunch of Patriot missile interceptors, and a surge in orders for armored automobiles will underpin their ends in coming quarters.

There are two main methods overseas governments buy arms from U.S. firms: direct business gross sales negotiated with an organization, or overseas army gross sales through which a authorities sometimes contacts a Protection Division official on the U.S. embassy in its capital. Each require U.S. authorities approval.

Direct army gross sales by U.S. firms rose to $200.8 billion in fiscal 2024 from $157.5 billion in fiscal 2023, whereas gross sales organized by the U.S. authorities rose to $117.9 billion in 2024 from $80.9 billion the prior 12 months.