Thanks America: Spending On Military Weapons Saw Its Largest Yearly Increase In A Decade

For those who who thrive on conflict (ie: countries with a strong military industrial complex - read: United States), 2015 was a year to be proud of.

The world defense market climbed to $65 billion in 2015, up by $6.6 billion from 2014 the consulting company IHS Inc said in its Global Defence Trade Report. That's the largest yearly increase in the past decade, led by Saudi purchases which jumped about 50% to $9.3 billion in 2015 according to Bloomberg.

As it continues its conflict in Yemen, and with an eye on countering Iran, Saudi Arabia's purchases consisted of Eurofighter Typhoon jets, F-15 warplanes and Apache helicopters, as well as precision-guided weapons, drones and surveillance equipment according to Ben Moores, a senior defense analyst at IHS Aerospace, Defence & Security who wrote the report.

Egypt became the world's fourth-biggest weapon's importer, spending almost $2.3 billion in 2015, ramping up from spending $1 billion or less before 2013. Moores says the higher spending by Egypt is being underwritten by France and other Gulf Arab states.

Iraq spent nearly as much as Egypt as it shifts money from operations and personnel toward procurement, IHS said. The country is battling Islamic State militants in the Anbar province and is preparing for the eventual battle to retake the northern city of Mosal.

Moores says that the IHS doesn't foresee oil prices recovering beyond current levels for another three years, which means oil exporters may have to cut back on procurement in the future - (or the US can just offer a discount for "slightly used" equipment, one or the other).

Another interesting point from the reports, as Bloomberg notes, is that states bordering the South China Sea increased defense spending by 71% since 2009 in attempt to deter China. Those purchases were for items such as aircraft and anti-ship missiles the IHS added.

From an export perspective, everyone will be shocked to learn that the United States was the top weapons exporter in 2015, supplying almost $23 billion in goods and equipment, of which $8.8 billion went to the Middle East.

"Going forward, the total may exceed $30 billion as deliveries of the F-35 begin to ramp up" the report said, referring to the next-generation fighter aircraft built by Lockheed Martin.

Russia came in at the world's No. 2 exporter, and is likely to increase its trade with Iran  as the country begins to replace its aging air force equipment, a massive undertaking that could cost $40 to $60 billion according to Moores.

France is poised to further its exports as well, as it builds a $39 billion submarine order it won from Australia earlier this year.

As we previously noted, the global arms trade is absolutely huge, and is continuing to grow as exporters stir up conflict in order to grow GDP look to help keep the peace with global arms sales. Remember this information the next time we hear about the imminent threat Russia poses, or about how the US just needs to make sure it sticks its nose into the South China Sea disputes.

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Here is a graphic (more here) showing the global arms trade between 2011-2015, with the usual suspects exporting and the Middle East significantly increasing imports.