North American companies witnessed a substantial decrease in robot purchases last year, reflecting concerns about economic slowdown and rising interest rates. This decline, marking the first setback in five years, signals a departure from the steady integration of advanced automation into the region’s workforce, Reuters news report said.
According to data released by the Association for Advancing Automation (A3), a leading industry group monitoring robot orders, companies acquired 31,159 robots in 2023, representing a significant 30 percent drop from the previous year.
This downturn in sale of robot, the largest in percentage terms since 2006, affected various sectors, including automotive, food, and metals manufacturing, which collectively constitute a significant portion of the market.
The automotive industry, accounting for roughly half of last year’s market, experienced a notable pullback in robot orders. Similarly, other sectors witnessed a slowdown in adoption, contributing to the overall decline in demand. Fourth-quarter figures revealed a continuation of this trend, with orders plunging by 8 percent compared to the same period a year earlier.
Despite some companies announcing initiatives to develop more sophisticated robot models, such as the partnership between robotics startup Figure and Germany’s BMW to deploy humanoid robots, the overall market struggled.
Concerns over a softening economy and excess inventories accumulated during the COVID-19 pandemic dampened sales for many robot manufacturers. Universal Robots, for instance, reported a 7 percent decline in revenue in 2023, attributing it to challenging economic conditions.
The pandemic initially fueled a surge in robot sales as companies sought to mitigate labor shortages and maintain production levels. However, the subsequent decline underscores the cyclical nature of the market, with economic uncertainties impacting investment decisions.
Dave Fox, president of CIM Systems, noted a downturn in his business, with several projects postponed amid economic concerns. While some customers are now considering new orders, suggesting a potential rebound, it remains uncertain whether the market will return to pre-pandemic levels.
Despite the challenges, industry experts remain cautiously optimistic about the future. Jeff Burnstein, president of A3, believes that the industry is poised for a resurgence in the second half of the year, as companies work through existing inventory and resume investment in automation.
Joe Gemma, chief revenue officer of Wauseon Machine, echoed this sentiment, emphasizing the persistent demand for automation solutions amid ongoing labor shortages across various industries.