© Reuters. FILE PHOTO: An individual works with robots at Procter & Gamble’s manufacturing facility in Tabler Station, West Virginia, U.S., May 28, 2021. REUTERS/Timothy Aeppel/File Photo
By Timothy Aeppel
(Reuters) – North American firms ordered a couple of third fewer robots final yr as worries a couple of slowing economic system and better rates of interest made it tougher to justify shopping for the superior machines, the primary hiccup in 5 years in what has been a gentle development of the robotic invasion of the area’s workforce.
“When the economy isn’t great, it’s easier to delay purchases,” mentioned Jeff Burnstein, president of the Association for Advancing Automation, an business group that tracks robotic orders.
Companies purchased 31,159 robots in 2023, a lower of 30% over the yr earlier than, the biggest drop in proportion phrases since 2006 and largest drop ever in web models, in keeping with the group, referred to as A3. The pullback occurred in automotive-related industries – which made up about half of the market final yr – in addition to different sectors akin to meals and metals manufacturing.
Orders within the fourth quarter hit 7,683, an 8% drop from the identical interval a yr earlier.
Slowing robotic orders got here at the same time as some firms introduced initiatives to develop extra superior variations of the machines. Robotics startup Figure mentioned final month it cast a partnership with Germany’s BMW (ETR:) to deploy humanoid robots within the carmaker’s South Carolina manufacturing facility to tackle sure bodily duties. Electric-vehicle maker Tesla (NASDAQ:) additionally has a humanoid robotic in improvement.
But for a lot of robotic makers, promoting present machines has been hampered by worries a couple of softening economic system and the surplus inventories constructed up through the COVID-19 pandemic. Universal Robots, a Danish maker of small, versatile robots, lately reported its income fell 7% final yr, to $304 million.
Universal’s president, Kim Povlsen, informed traders: “2023 was characterized by a difficult economic and business environment for many of our core customers with global industrial activity slowing in the first half of the year.”
COMING OFF A RECORD YEAR
Robot gross sales boomed through the COVID-19 pandemic – as producers scrambled to make use of the machines to churn out items amid a dire labor scarcity. Indeed, 2022 marked a file yr for orders, in keeping with A3’s knowledge.
To make certain, robots are only one kind of apparatus firms want, and different gauges of spending have held up higher within the U.S. Orders for non-defense capital items excluding plane – a measure intently watched by economists to trace traits in enterprise spending – rose 1.7% final yr, in keeping with the Commerce Department, suggesting that investments in additional primary varieties of tools remained near regular because the economic system defied expectations of a sharper slowdown.
Dave Fox, president of CIM Systems Inc, a Noblesville, Indiana, firm referred to as an integrator that assembles robotic methods for purchasers, mentioned his enterprise began off robust final yr however then slumped.
“Several big projects got pushed into this year,” mentioned Fox. “There were definitely a few customers who brought up their concern about where the economy is headed. And interest rates probably didn’t help.” Fox estimates his enterprise quantity fell 30% in 2023, in contrast with the yr earlier than.
Fox mentioned some prospects who delayed orders at the moment are asking for up to date quotes, which is an effective signal for enterprise within the months forward. But he mentioned it’s too early to say whether or not enterprise will return to lofty pandemic ranges.
A3’s Burnstein mentioned most robotic producers he speaks with are optimistic that enterprise will decide up through the second half of this yr.
Burnstein mentioned the business has largely labored its method via the distortions attributable to the pandemic.
During the disaster, many firms put in further orders for robots as a result of they anxious about receiving deliveries amid manufacturing delays and a breakdown in international provide chains. “There’s still this feeling that companies were buying in advance of their needs (in 2022),” mentioned Burnstein, “so a lot of companies now have inventory to work through before they order a lot of new robots again.”
Joe Gemma, chief income officer of Wauseon Machine, a methods integrator in Ohio, agreed there was a listing glut that distorted the enterprise.
“A lot of us were ordering extra inventory,” he mentioned. “Our customers were too.”
Gemma mentioned an ongoing scarcity of labor within the U.S. means the robotic enterprise will proceed to thrive. “I was at a plant recently that normally has 600 people working in production – and they have 140 open positions,” he mentioned. “Almost every place we go, there’s still a workforce challenge.”