While automation adoption has not increased unemployment, a slow U.S. economy and high interest rates have resulted in a decline in North American robot orders for the second quarter in a row after record purchases in 2021 and 2022.
Companies ordered 7,697 robots valued at $457 million from April to July 2023, a 37% decline in robot orders and 20% drop in value over the same period in 2022, according to the latest report from the Association for Advancing Automation (A3).
When combined with first-quarter results, the robotics market in North America is down 29% in comparison with the first half of last year, with a total of 16,865 robots ordered. This drop came after a record 2022, where North American companies ordered 44,196 robots, up 11% over 2021, the previous record.
U.S. manufacturers caught between labor, capital shortages
“Over the last five years, we’ve seen a steady acceleration of robot orders as all industries have struggled with a labor shortage and more non-automotive companies recognize the tremendous value automation provides,” stated Alex Shikany, vice president of membership and business intelligence at A3.
”After this post-COVID surge, however, we’re seeing a drawback in purchases, exacerbated by the slow economy and high interest rates,” he added. “While many companies continue to automate, others just don’t have the capital to invest right now, despite their struggle to find workers willing to do many of the dull, dirty and dangerous jobs that remain unfilled.”
The ongoing labor shortage remains a key driver of automation, especially in manufacturing, which was down another 2,000 jobs in July, according to the U.S. Bureau of Labor Statistics. An increasing trend towards reshoring tasks in North America is another contributing factor, said A3.
“Record attendance at trade shows such as Automate in Detroit this year show even greater interest in robotics and automation than ever before, but as these numbers show, not all are ready or able to pull the trigger just yet,” said Jeff Burnstein, president of A3. “When the economy improves, however, the companies who have learned about the latest innovations in automation and how they can help them increase productivity, deal with labor shortages and get to market faster will be ready.”
Automotive and other orders at more equal rates
Non-automotive customers ordered more robots in the second quarter of 2023 than automotive customers, with 52% of units going to non-automotive industries, and 48% going to automotive OEMs and component suppliers. However, both categories were down compared to the second quarter of last year, with non-automotive orders down 21% and automotive orders down 49%.
The strongest North American robot order demand in Q2 came from the semiconductor and electronics industries, followed by life sciences/pharma and biomedical, then plastics, rubber, and metals. Automotive components, food and consumer goods, and automotive OEMs showed the biggest drops, said A3.
A3 presents events including AI and Robot Safety Conference
Those interested in looking ahead and learning about robot safety or artificial intelligence and smart computing can attend A3's International Robot Safety Conference and AI & Smart Automation Conference, co-located in Pittsburgh the week of October 9. Registration is now open.
The Association for Advancing Automation said it is the leading global advocate for the business benefits of automating. The association's members include more than 1,200 manufacturers, component suppliers, systems integrators, end users, academic institutions, research groups, and consulting firms worldwide.
A3 hosts a number of industry events, including the A3 Business Forum from Jan. 15 to 17, 2024, in Orlando; Automate 2024 from May 6 to 9, 2024, in Chicago; and the Autonomous Mobile Robot & Logistics Conference from Oct. 8 to 10, 2024, in Memphis.
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