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Global defense spending reached a record high in 2022, an unsurprising revelation, given the outbreak of the war in Ukraine and its wide-reaching impact on European and North American foreign policy. Just last week, the US unleashed its latest barrage of supplies for Ukraine, bringing the grand total of its military aid alone to roughly $35.5 billion. This expenditure, on top of the American military’s already gigantic demands, continues to strain stockpiles of missiles, artillery, and other defense products. 

American defense contractors have leveraged improved financial performance to focus on the expansion of their supply chain and logistics capabilities, but materially increasing output remains difficult. That could complicate the performance of Ukraine on the battlefield, as well as the supply of more advanced US equipment to Ukraine. As it stands, US fighter jets, long-range missiles, and reaper drones appear to be out of the question for now.

Related ETF: SPDR S&P Aerospace & Defense ETF (XAR)

Per the Stockholm International Peace Research Institute (SIPRI), global defense spending jumped to an all-time high of $2.24 trillion in 2022. That marked an eighth straight year of growth and, with the initiation of a new major conflict in Europe, the continent’s cumulative spend on arms expanded by 13%, its largest increase in 30 years. This data shows just how transformative Russia’s invasion of Ukraine has been for European nations, particularly those in the east that now fear they could face the same sort of incursion the Ukrainians have been enthralled in for over a year. For example, Al-Jazeera notes that that Finland’s spending is up 36% and Lithuania’s military spending up by 2%, according to SIPRI.

Ukraine’s spend on their military needs unsurprisingly experienced one of the largest increases, swelling to six times its 2021 level at $44 billion. Though Russia’s military spend was nearly double that total for the year, Ukraine has been able to level the playing field with significant international support that has boosted defense spending across the western world.

By far, the leading source of support for Ukraine has been the United States. Following a newly-announced package of support for Ukraine’s war effort just last week, worth $325 million, the United States has committed roughly $35.5 billion in military aid to the country since Russia’s invasion began on February 24, 2022. American efforts to bolster Ukraine have resulted in 36 drawdowns of equipment from Department of Defense (DoD) inventories and an array of new orders with various defense contractors. That total is up from $28.9 billion in a previous update on February 21 of this year. Last month, the Biden administration outlined a record $886.3 billion budget proposal for national defense in fiscal 2024, an increase of 3.2% YoY.

MRP has focused heavily on the US’s expensive contributions to the Ukrainian war effort, which has been an increasingly risky venture, given the strain it has now placed on America’s own military supplies and…

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