Major Arms Purchases Await - May Become Enormous Bottleneck

The defence stocks have soared after signals that massive defence investments are expected in Europe. However, the risk is that the industry cannot scale up at the same pace. It can become a huge bottleneck, says Martin Lundmark at the Defence University.

» Published: February 21 2025

Major Arms Purchases Await - May Become Enormous Bottleneck
Photo: Fredrik Sandberg/TT

Share this article

"Buy, buy, buy".

This was the message from Danish Prime Minister Mette Frederiksen when she announced a multi-billion kronor injection into the Danish defense earlier in the week.

The money, equivalent to around 75 billion Swedish kronor, means that Denmark's defense investments in the short term will reach up to three percent of the country's GDP.

At the same time, Sweden and other countries are also considering how to increase their defense investments following the US announcement that Europe must take greater responsibility for its own defense.

Even if Europe does not go as far as the five percent of GDP mentioned by US President Donald Trump, it will still mean a massive buildup, notes Martin Lundmark, university lecturer in defense systems at the Swedish Defense University.

This means that it may take time before the investments are seen in practice.

A similar situation arose a while after Russia's full-scale invasion of Ukraine. If it becomes as much now or more, it will be an enormous increase and such spare capacity does not exist in the defense industry, says Martin Lundmark.

Money but no time

Robert Limmergård, Secretary-General of the Swedish Security and Defense Industry Association (Soff), is on the same track.

What we're seeing now is that they have the money, but they don't have the time, he says.

Now countries have chosen to procure, and are trying to procure materiel, as quickly as they can. But it also needs to be delivered.

Among other things, he continues, every order is usually preceded by a relatively long procurement process.

We usually say that nine out of ten customers are abroad. But it's still the case that there is a procuring authority in most countries. We usually say that in simple deals it takes 4-5 years from start to finish.

Faster decisions

According to Martin Lundmark, there are however important lessons to be learned from the buildup that has already taken place. For example, from the ammunition and grenade area, where the EU's promises to Ukraine have led to a coordinated effort.

There were bottlenecks when it came to certain explosives, fuses, and more. But they've got a good grip on it now, he says.

There was a decisiveness that emerged. It was faster to make decisions where they might have previously hesitated more. The entire defense area has become so incredibly prioritized, so it's a change in priorities in short.

Tags

Author

TTT
By TTEnglish edition by Sweden Herald, adapted for local and international readers

More news

Klarna Prepares for New York Stock Exchange Debut
1 MIN READ

Klarna Prepares for New York Stock Exchange Debut

Sanctions Loom for Companies Trading with Russia
1 MIN READ

Sanctions Loom for Companies Trading with Russia

Wall Street Drops After July Inflation Data Released
2 MIN READ

Wall Street Drops After July Inflation Data Released

The Job Market in Sweden is Cooling Down - Significant Differences Between Industries

The Job Market in Sweden is Cooling Down - Significant Differences Between Industries

US Inflation Steady at 2.6 Percent in July
1 MIN READ

US Inflation Steady at 2.6 Percent in July

Extended Nuclear Shutdown Raises Electricity Prices in Southern Sweden
2 MIN READ

Extended Nuclear Shutdown Raises Electricity Prices in Southern Sweden

Price Pressure Reduces Alibaba's Second Quarter Profit
1 MIN READ

Price Pressure Reduces Alibaba's Second Quarter Profit

Ikano Bank Reports Loss Amid 670 Million Kronor Credit Losses
1 MIN READ

Ikano Bank Reports Loss Amid 670 Million Kronor Credit Losses

Norway and US Senator Clash Over Oil Fund's Caterpillar Divestment
1 MIN READ

Norway and US Senator Clash Over Oil Fund's Caterpillar Divestment

Tesla Denied New Charging Stations Amid Swedish Union Strikes
1 MIN READ

Tesla Denied New Charging Stations Amid Swedish Union Strikes

No Decision Yet in Legal Battle Between Lisa Cook and Trump
2 MIN READ

No Decision Yet in Legal Battle Between Lisa Cook and Trump

Stockholm Stock Exchange Sees Five Consecutive Days of Decline
2 MIN READ

Stockholm Stock Exchange Sees Five Consecutive Days of Decline

Saab to Develop Unmanned Underwater Vehicle for FMV
1 MIN READ

Saab to Develop Unmanned Underwater Vehicle for FMV

Swedish Economy Shows Recovery with Revised GDP Growth
1 MIN READ

Swedish Economy Shows Recovery with Revised GDP Growth

Academedia CEO Unconcerned About Potential Social Democratic Government
2 MIN READ

Academedia CEO Unconcerned About Potential Social Democratic Government

US Ends Duty-Free Exemption for Small Package Imports
1 MIN READ

US Ends Duty-Free Exemption for Small Package Imports

Swedish Investors Shift Focus from Defense Stocks Amid Peace Talks
2 MIN READ

Swedish Investors Shift Focus from Defense Stocks Amid Peace Talks

Consumer Agency's Proposed Telemarketing Ban Could Cost Thousands of Jobs
2 MIN READ

Consumer Agency's Proposed Telemarketing Ban Could Cost Thousands of Jobs

Asian Stock Markets Mostly Rise in Early Friday Trading
1 MIN READ

Asian Stock Markets Mostly Rise in Early Friday Trading

US Stock Market Rises Despite Urban Outfitters' Sharp Decline
1 MIN READ

US Stock Market Rises Despite Urban Outfitters' Sharp Decline