Israel rises in world defense spending ranking

Elbit artillery Photo: Elbit Systems

Israel rose two places from 17th place in 2016 to 15th place in 2017 according to Deloitte.

Israel's defense spending totaled $19.6 billion in 2017, putting Israel in 15th place among the 20 countries with the highest military spending, according to an annual report by international audit, consulting and financial advisory firm Deloitte.

Israel's defense spending totaled $17.8 billion in 2016 and $17.5 billion in 2015. Israel rose two places from 17th place in 2016 to 15th place in 2017. Deloitte consumer and industrial products leader Eli Tidhar wrote, "At a time when some countries in the Middle East have had to cut their defense spending because of the drop in oil prices, Israel increased its defense spending."

Deloitte said that the US was the leader in defense spending with $606 billion, followed by China with $226 billion and Russia in third place with $70 billion. Saudi Arabia took fourth place with $62 billion in 2017, followed by France in fifth with $56 billion in defense spending.

Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT), controlled by businessperson Michael Federmann, was the only Israeli company among the list of the world's 100 leading defense firms published by Deloitte in recent days. In the rating, Elbit Systems took 40th place in 2017 with $3.4 billion in sales, up slightly from $3.3 billion in 2016. Boeing topped the list, followed by Airbus in second and Lockheed Martin in third.

'We see the US industry growing stronger following the wave of increases in defense spending. All of the manufacturers in the US gained ground in comparison with their competitors in Europe, with increased growth and profit, thereby highlighting the need of the Israeli industry to find strategic solutions for the US as a growing market," Tidhar told "Globes."

Another recent rating, this time by consultation and accounting firm Baker Tilly International, put Israel in seventh place worldwide in its military revenue in 2018. Israel's rating was based on the revenue of the four largest Israeli defense companies: Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1), Elbit Systems, IMI Systems Ltd. (IMI), and Rafael Advanced Defense Systems Ltd.. In this rating, Israel rose from eighth place in 2016 to seventh place in 2017 with sales totaling $8.76 billion. The US headed the defense revenue list with $222 billion.

Although Israel improved its rating, an analysis of the data by Baker Tilly partners and strategy consulting division head Yaki Baranes shows that the top three Israeli companies lost ground: Elbit Systems went from 27th place in 2016 to 28th place in 2017, IAI fell from 33rd place to 39th place, and Rafael was down from 37th place to 42nd place. The only one of the four companies to improve its ranking in comparison with the preceding year was IMI, which rose from 92nd place to 86th place on the strength of a rise in revenue from $496 million to $611 million. Baranes said that the looming merger between Elbit Systems and IMI would substantially strengthen Elbit Systems, which would be reflected in its future ranking.

Published by Globes [online], Israel business news - www.globes-online.com - on August 26, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Elbit artillery Photo: Elbit Systems
Elbit artillery Photo: Elbit Systems
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