Global supply chains are faced with sustained pressure as many regions race to produce weapons in the face of rising power competition, according to a new analysis by GlobalData.
The data analytics and consulting company noted that Europe and many other regions are opening new production lines, consolidating control of rare earth elements, re-learning industrial skills, and modernizing their armed forces.
It said that in 2024 alone, Russia is anticipated to produce 5 million artillery shells and around 700 cruise missiles.
"As a result, supply chains face sustained pressure as the world countries move to rearm," the report added.
GlobalData's latest report, 'Scaling Rearmament,' also noted the challenges facing countries in Europe and elsewhere in expanding production capacity for high-intensity warfare, as global defence spending is expected to rise to US$2.45 trillion by 2028.
"Vital items such as artillery shells, air defence missiles, and armoured vehicles are seeing rates of attrition in the war in Ukraine at rates unheard of in recent times," commented James Marques, Aerospace, Defense & Security Analyst at GlobalData.
He added that western nations are having to balance supporting Ukrainian troops with refilling their own stocks as defence budgets expand.
"The 800,00 shells found by Czechia on the international market in recent weeks are a stopgap measure — across Europe, the economy slowly turns to 'wartime production' mode," he said.
The report added that the UK alone has donated 300,000 artillery shells to Ukraine up to January 2024 and has signed deals with BAE systems worth £2.4 billion (US$3.1 billion) for an eight-fold increase up to 2026, alongside other munitions.
Across Europe, firms such as Rheinmetall and KNDS are breaking ground on new production lines.
The report said some key supply chain chokepoints include machine tools and the labour force itself — as many roles in arms production cannot yet be replaced by industrial automation.
"Issues are not exclusive to Europe, however. In the US, the submarine-industrial base has announced it is halving the scheduled construction of Virginia-class attack boats, a direct blow to the AUKUS military alliance announced in 2021," Marques said.
"Defence ministries in the West are beginning to revise their procurement systems, seeking more responsive and agile solutions with the aid of commercial-off-the-shelf (COTS) technologies to deliver at both pace and scale. Assuming a maximum production rate, the EU could hit 2.6 155mm shells by the end of 2024," he added.
Marques went on to note that the so-called 'peace dividend' that came in the form of reduced defence spending at the end of the Cold War is over.
"If Europe wants the means to defend itself, especially if US isolationism grows, then the 'just-in-time' mentality of defence production must be changed," the Aerospace, Defense & Security Analyst at GlobalData, further said.
