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According to a new government report, the number of guns manufactured in the US has nearly tripled since 2000. Gun purchases have also shifted over time, with handguns now outselling rifles. (The New York Times) |
NH: One month after Congress passed a landmark bipartisan gun safety bill, House Democrats are pushing for more action on gun control.
Lawmakers are pursuing an assault weapons ban, while a panel formed after the Uvalde shootings continues to investigate the sales tactics of the gun manufacturing industry.
Among those interviewed last week was Marty Daniel, owner and CEO of Daniel Defense, which makes the AR-15-style gun used in the Uvalde shooting.
Daniel has come under fire for aggressively marketing to young men in ads that invoke popular games like Call of Duty and feature toddlers and children holding assault rifles. He insisted that gun manufacturers bear no responsibility for mass shootings and that nothing has changed about guns over the past few decades.
Maybe nothing has changed about the guns themselves. But a lot more of them are now being made. New research shows that domestic US gun production has exploded over the past two decades.
According to a report from the Bureau of Alcohol, Tobacco, Firearms, and Explosives, US gun manufacturing has risen by +187% since the turn of the century.
In 2000, 3.9M guns were manufactured in the US. In 2020, that number hit 11.3M. Firearms manufactured per 100,000 people increased from 1,397 in 2000 to 3,410 in 2020. Again, that's a +187% increase.
The chart below breaks down domestic gun manufacturing by classification. NFA weapons, requiring special federal approval to own, include fully automatic firearms, short-barrel shotguns, guns with built-in silencers, and so on. GCA firearms comprise almost everything else. In 2020, GCA guns made up 98% of domestically manufactured firearms.
Manufacturing tends to follow sales. Sales go up or down according to popular perceptions about crime and according to fears of imminent new restrictions on sales.
The possibility of a pro-gun control Democrat in the White House typically leads consumers to stock up on firearms. Manufacturing rose in 2013 after Obama was just reelected and the Newtown mass shooting renewed calls for stricter gun laws.
It also increased during the runups to the 2016 and 2020 elections. Conversely, production typically slows after a Republican wins the presidency. (See "The 'Trump Slump' Continues for US Gunmakers.”)
Over the last 20 years, there has been a significant increase in the production of pistols. In 2000, pistols made up 26% of all manufactured GCA guns. In 2020, they made up 50%. That's an increase of +24 percentage points.
Another telling statistic: The number of manufactured rifles was 59% higher than pistols in 2000, but by 2020 pistols were ahead of rifles by 100%.
Why are pistols growing in popularity? While rifles are traditionally used for hunting, pistols are usually bought for self-defense and target shooting. According to Gallup, the percentage of gun owners who own a firearm for hunting has stayed relatively steady from 2000 to 2021.
But the percentage who own a gun for protection has increased from 65% to 88%. Some of this recent emphasis on protection is no doubt related to the rise in violent crime over the last two years. (See "FBI Releases Official 2020 Crime Report.")
Which companies have benefited from this bonanza in gun production? The top domestic producers of both GCA firearms and pistols are Smith & Wesson Corp (SWBI) and Sturm, Ruger, & Company (RGR).
Between 2016-2020, SWBI manufactured 17.2% of all domestic GCA firearms and 26.0% of all pistols. RGR manufactured 17.1% of GCA firearms and 18.0% of pistols. These are both US-based businesses.
You may be surprised to see foreign companies on the list of top domestic gun producers. Glock is based in Austria, Taurus in Brazil, and Beretta in Italy.
But in the last few years, Glock and Taurus have built factories in Georgia and Beretta in Tennessee. Why? Producing in the US, they can avoid costly import regulations. Moreover, made-in-the-USA marketing appeals to many gun buyers.
The rest of the top manufacturers (Sig Sauer; O F Mossberg & Sons; WM C Anderson; Henry RAC Holding Corp; JJE Capital Holdings; Kimber MFG; SCCY Industries; Springfield; Hi-Point) are all US-based.
These companies' prices have performed well over the last two decades. SWBI has increased +1,639% since 2000. And RGR has increased +544% over the same period. The S&P 500, meanwhile, has risen +200%.
However, both tickers are volatile. Big price spikes are driven by the same emotion-driven sales surges that underlie the ups and downs of production. These emotions, as we have seen, include fear of crime, fear of new legislation, and fear of new regulation. The resulting sales swings lead investors to overreact in the market. In short, these are stocks that are highly responsive to the news cycle.
In the mid-2010s, SWBI and RGR took some heat when its weapons were used in several mass shootings. But both stocks have since hit all-time highs during the Biden administration.
In June, shares surged once more after the Supreme Court struck down a longstanding gun-control provision in New York. Despite their volatility, these two companies still lead the pack--and continue to be the winners of America's gun manufacturing boom.
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ABOUT NEIL HOWE
Neil Howe is a renowned authority on generations and social change in America. An acclaimed bestselling author and speaker, he is the nation's leading thinker on today's generations—who they are, what motivates them, and how they will shape America's future.
A historian, economist, and demographer, Howe is also a recognized authority on global aging, long-term fiscal policy, and migration. He is a senior associate to the Center for Strategic and International Studies (CSIS) in Washington, D.C., where he helps direct the CSIS Global Aging Initiative.
Howe has written over a dozen books on generations, demographic change, and fiscal policy, many of them with William Strauss. Howe and Strauss' first book, Generations is a history of America told as a sequence of generational biographies. Vice President Al Gore called it "the most stimulating book on American history that I have ever read" and sent a copy to every member of Congress. Newt Gingrich called it "an intellectual tour de force." Of their book, The Fourth Turning, The Boston Globe wrote, "If Howe and Strauss are right, they will take their place among the great American prophets."
Howe and Strauss originally coined the term "Millennial Generation" in 1991, and wrote the pioneering book on this generation, Millennials Rising. His work has been featured frequently in the media, including USA Today, CNN, the New York Times, and CBS' 60 Minutes.
Previously, with Peter G. Peterson, Howe co-authored On Borrowed Time, a pioneering call for budgetary reform and The Graying of the Great Powers with Richard Jackson.
Howe received his B.A. at U.C. Berkeley and later earned graduate degrees in economics and history from Yale University.
