After experiencing two years of growth, industrial robot orders in North America dropped by nearly one-third last year. According to the Association for Advancing Automation (A3), 31,159 industrial robots were purchased by North American companies in 2023, a significant decrease from 44,196 in the previous year, marking a 30% decline in this important market. The number is also lower compared to the 39,708 robots purchased in 2021.
This decline, while steep, was not entirely unexpected. A report from the industry group in August had already highlighted a 37% year-over-year decrease in robot orders for the second quarter of 2023, signaling the second consecutive decline in the industry.
Despite the drop, it is important to note that both 2021 and 2022 had seen record sales in the industry. Therefore, some regression to the mean was anticipated. The reasons behind the decline are more complex than just a slowdown in automation adoption post-pandemic. The industrial robotics sector is not immune to the macroeconomic challenges faced by the broader tech industry, with manufacturers now considering robotics-as-a-service (RaaS) as an alternative to upfront costs.
The uncertain economic climate in 2023 led to caution among industries, particularly in manufacturing, which is a key driver for automation. The chip shortage and economic struggles led to postponed purchases, resulting in a 34% drop in orders for automotive manufacturing robots, which account for more than half of the total. Non-automotive robots saw a slightly lower decline of 25% in orders, with sectors like metal electronics manufacturing, food/consumer, medical, and plastics/rubber showing significant demand.
A3 president Jeff Burnstein expressed optimism for the future, noting that the end of 2023 saw an increase in robotic sales compared to the previous quarter, with equal interest from both automotive and non-automotive industries. He mentioned that industries are increasingly recognizing the benefits of automation in overcoming challenges. While automotive orders are expected to rise again, there is an indication that orders from non-automotive sectors will also increase as they embrace robotics technology.
Looking ahead, economic factors and hiring challenges in various industries will continue to influence robot sales. The adoption of automation comes with its own set of challenges, and the maturity of new robotics technologies will play a role in widespread adoption. The automotive manufacturing sector, which has a long history of using robots, has been impacted by slowing electric vehicle (EV) purchases, contributing to the overall decline in robot orders.
