The North American industrial automation market is growing at a healthier-than-expected rate, according to a report released last week by the Association for Advancing Automation, or A3. While it’s easy to assume that automotive manufacturing is already a heavy user of robotics, the recent growth demonstrates that there’s still plenty of room for adoption across industries.
“Based on the worldwide forecast from the IFR [International Federation of Robotics], we expected 10% to 15% growth in the region,” said Alex Shikany, director of market analysis at A3 in Ann Arbor, Mich. “If we contextualize with their numbers, we’ve outperformed. It’s surprising that we’re up this much year over year, but it’s not completely divergent from the overall trend.”
- In the first half of 2017, the North American industrial automation market grew by 33% over 2016 to 19,331 units, and sales grew by 26% to $1.031 billion.
- Car makers led in the use of robotics, but other industries are also increasing their use of automation.
- Improving technologies such as machine vision have led to record-setting sales, despite fears of job displacement and recession.
Automotive drives adoption
“Automotive had a great first half [of 2017] in OEM and component supplier orders,” Shikany said. “But it was also the best first half in non-automotive industry. That’s great news, no matter how you slice it.”
“Look at growth rates in the first half — there are interesting tidbits in industries like metals, plastics, and rubber,” he told Robotics Business Review. “They were pretty sizable in auto components. Automotive hasn’t yet dried up, but other companies are still automating. There’s a lot of business to be had.”
Carmakers are using robotics to become more responsive to the market, so that industry is far from saturated.
“We’d expect automotive robot sales to drop because of slow changeover in vehicle models, but that’s not happening,” said Bob Doyle, director of communications at A3. “Model changeovers now happen in less than seven years. It’s more like two to three years, which has helped continue strong push in automotive since the end of the Great Recession.”
Sensors spur automation market growth
“We usually check these numbers at the half year. At the full year, we’ll put all the statistics together from A3’s member organizations — all three are at record highs,” said Doyle, referring to the Robotic Industries Association (RIA), Advancing Vision + Imaging (AIA), and the Motion Control Association (MCA).
“We can attribute this strong growth to multiple causes,” explained Shikany. “We’ve just had contact with a lot of member companies in [A3] committee meetings, and they’ve told us why.”
“Yes, it’s thanks to advances in enabling technologies like vision, imaging, sensing, and motion control. There’s a lot of interest surrounding these now that they’re more affordable,” he continued. “There’s also the value proposition of collaborative robots. The ROI is easier for customers to justify.”
“There’s a greater awareness beyond the auto industry,” Shikany said. “There’s a realization of the need to compete in the global marketplace and that robots can do more than before.”
“The automation market in the past may not have focused on smaller businesses, but new tech now allows integration that wasn’t possible before,” he added.
The North American robotics market will experience a compound annual growth rate of 10.3% and reach $46.5 billion by 2022, predicts Research and Markets.
Robots plus jobs
“The data doesn’t bear out the ‘jobs versus robots’ argument,” Shikany said. “We’ve been tracing shipments from 2010 to the present, and if you track that with manufacturing employment, both are rising.”
“As The Washington Post noted, it’s the reverse of the jobs issue,” said Doyle. “Companies can’t find the people to fill or stay in certain jobs, so they need to bring in robots.”
“The ROI calculations for these applications didn’t make sense in the past, but now because of cobots and mobile robots, it’s faster and easier to invest in robotics,” he said.
“As robots are ordered or installed, companies like Amazon are still hiring employees,” Shikany said. “Our members are looking to hire new people, but they’re having difficulty in bridging the skills gap. That’s a challenge in the years to come — we need apprenticeships and robotics curriculums at two- and four-year schools.”
Free trade preferred for automation
International tensions could also pose challenges for robotics, unmanned systems, and artificial intelligence. Trade restrictions could encourage reshoring of production, but they’d also affect global automation market access.
“It’s tough to say which way things will go depending on policy,” Shikany said. “A lot of manufacturing happens in Asia, but there’s still some in the U.S. Robotics is a global industry that requires imports and exports around the world.”
“Imposing any tariffs or taxes would not be a good thing,” Shikany added. “We’d like to promote free trade, which benefits the automation market as a whole.”
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Robotics builds resistance against recession
Several economists have predicted that the U.S. will enter an economic recession in the next year or so. How will this affect the automation market? Could it even help robotics adoption?
“We’ve been hearing that as well,” Doyle said. “While we’re keeping an eye on the possibility of a cyclical softening … indicators for the remainder of 2017 and early 2018 are all positive.”
“As we’ve seen in past recessions, growth rates would slow a bit, but there would likely still be growth,” he said.
“Automotive has been 65% to 70% of automation and is cyclical, but we’re pleased to see other industries adopting automation,” Doyle said. “That would hopefully level out those dips and help us weather them.”
“Orders in the second quarter were especially strong in automotive. That might be tough to keep up,” said Shikany. “But we expect 2017 to end at record levels.”
Editor’s Note: A3’s Bob Doyle will be speaking on “Automating Your Operations to Optimize Production” at RoboBusiness 2017 in Santa Clara, Calif., next month.