Industrial Robots: Out of Favour
Industrial robots purchased by companies in North America dropped by a third last year
To the uninitiated, this headline could mean nothing. But, those who were convinced that the future of manufacturing is hands free (of humans), need to think again as after a two-year high growth, orders for industrial robots dipped by a third in 2023 across North America. And the crunch is that experts had foretold this decline.
According to the Association of Advancing Automation (A3), enterprises ordered 31,159 industrial robots in 2023, which was a 30% decline over the 44,196 orders placed during 2022. In fact, the actual numbers for 2023 is lower than the total industrial robots purchased during the whole of 2021 (39,708).
What could be the issues facing the industry?
Does this mean that the industry isn’t getting the right products at the correct price range? Or is it that innovation took a backseat when demand outstripped supply? Industry experts note that though the drop is steep, it isn’t surprising as data from an industry report last August had projected a 37% year-on-year decline during Q2 of 2023, the second straight one at that.
During the pre-pandemic period, the industrial robots were red-hot and the current decline could be a cause for concern amongst manufacturers. However, one must take into account that the last two years saw macroeconomic headwinds take some heat off the technology business and industrial robots don’t come cheap.
There’s talk now of RaaS models
In recent times, it is no surprise that there is talk of robotics-as-a-service (RaaS) rental models doing the rounds. Given that manufacturing continues to drive automation and since 2023 has seen most enterprises curtail non-essential expenditure, the decline in industrial robots procurement isn’t all that surprising.
Then there is also the issue around microchip shortages. And the immediate impact was on the robots in the automobile industry, which incidentally accounts for more than half the total number of total robots procured. There was a considerable 34% drop in the number of robots procured by the automotive industry.
Industry body is worried, but not all that much
The apex industry association (A3) noted that metal electronics manufacturing, food/consumer, medical and plastics/rubber saw the largest demand outside of automotives. A3 President Jeff Burnstein says, “While robotic sales were down over the year, 2023 ended with both an increase over the previous quarter and a nearly equal number of sales from automotive and non-automotive companies. Both are promising signs that more industries are becoming increasingly comfortable with automation overall. While we expect to see automotive orders rise again, there’s little doubt that orders will increase from all non-automotive industries as they recognize how robots can help them overcome their unique challenges.”
By the looks of it, the economic factors that resulted in an overall slowing down of the economy was responsible for curtailing industrial robotics. However, what also stands out is the growth pains amongst companies that did automate as some of these early adapters believe that the technology itself isn’t maturing as fast as they expect it to.
This could result in a further slowing down of broader and more meaningful adoption of robotics in the manufacturing industry. One can only hope that the early warning signals cause the industry to wake up and invest more time and efforts into technology upgrades so that those who made the choice first to go robotic don’t feel let down.
