With primaries shaping up as a referendum on Iraq, The Economist carries an interesting and counter-intuitive report that the war is turning out to be surprisingly bad for the big five defence contractors, Lockheed Martin, Boeing, Northrop Grumman, General Dynamics and Raytheon.

With the asymmetric conflict confronting traditional military strategies, it looks like there will be cuts to lucrative programs.

"The problem is not just the cost of the fighting in Iraq, but also its nature. The shift in the style of warfare, towards such "asymmetric" conflicts, means that there is now less demand for big-ticket weapons systems. Things were simpler in the cold war, when the Pentagon spent about $150 billion a year on new weapons. That fell to around $50 billion after the fall of the berlin wall. America's 15 main defence contractors reacted by consolidating into today's top five. When he became president, George Bush promised to increase defence spending, and he has done so: the procurement budget is back up to nearly $160 billion, despite the lack of a Soviet Union.

"As a result, the five main defence contractors-Lockheed Martin, Boeing, Northrop Grumman, General Dynamics and Raytheon-have had a wonderful five years. Since the terrorist attacks in September 2001, their sales have risen by around 10% a year. Last year their combined profits increased by 25% to almost $13 billion. Although most of the defence budget is spent on big weapons systems that are of little or no use in the fight against terrorists, the political climate after the attacks of September 11th 2001 made it impossible to oppose the administration's desire to increase defence spending. Besides, such spending means more jobs, often in areas where there is little other manufacturing.

"This bonanza now looks as if it is coming to an end. Spending on big weapons systems designed to take on an aggressive rival superpower looks increasingly irrelevant and is being cut. Since cancelling projects outright is politically awkward, this has so far meant scaling them down.

"Cuts in fighter jets and warships, which are little use in an urban guerrilla conflict, are probably inevitable. Investing in new technologies, such as Future Combat Systems, to make individual soldiers more capable and responsive, makes more sense. So the winding up of the C-17 program is curious. The more American troops have to be deployed in places like Iraq and Afghanistan, the more need there will be for aircraft to carry them and their equipment to the battlefield-and for in-flight-refuelling tankers to keep aircraft flying in areas where landing is dangerous or impossible."

And with the mess in Iraq shaping up as the war without end, it looks like tough times are looming for the industry.