The world is at its most dangerous since the second world war. The war in Ukraine will soon enter its third year, with Russian President Vladimir Putin vowing to intensify attacks. The Israel-Hamas conflict is already into its fourth month, and clashes in the Red Sea, Lebanon and Iran raise the risk that hostilities could spill over into an all-out regional war. China’s economic rise has come with greater military assertiveness too. A more belligerent world is bad news for everyone — except perhaps the defence industry. As threats rise, so do its order books.

Pipelines at some of the world’s biggest defence companies — including Lockheed Martin, General Dynamics and BAE Systems — are near the healthiest on record, having grown 10 per cent between 2021 and 2022 alone. Demand for military hardware remained strong last year too. Governments are buying weapons, ammunition and equipment to fight wars, donate to allies, or build reserves. In Europe, countries are replenishing national stockpiles depleted by offerings to Ukraine. Global military expenditure hit a record $2.2tn in 2022.

Investors have got on board. The MSCI’s global benchmark for defence stocks is up about 15 per cent over the past 12 months. British defence shares — which have soared more than 140 per cent since the start of 2021 — are at record highs. Private equity funds are circling for opportunities, and venture capital investment in US military tech start-ups is booming.