North American companies set a new record for robot orders in 2022 with 44,100 robots ordered, an 11% increase from the previous year. The value of these robots totaled $2.38 billion, an 18% increase from the previous year, as per data from the Association for Advancing Automation (A3). The labor shortage in the region, which has the tightest labor market in decades, is driving companies to adopt automation as a quick solution to fill the workforce gap.
Slackening demand for robots
Demand for robots, however, appeared to have slackened near the end of the year, raising questions about the strength of 2023 in the face of shifting household consumption patterns and rising interest rates aimed at bringing high inflation under control.
A3 President, Jeff Burnstein, noted a visible slowdown in orders towards the end of the year, which was propped up only by the auto industry. According to Burnstein, a shift away from pandemic-era consumer behavior and supply chain problems may have distorted last year’s results. “You saw companies like Amazon put a pause on building new warehouses, which means they probably canceled or delayed purchases of new automation,” added Burnstein.
Automation in the automotive industry
More than half of the robots ordered last year were from automakers and their suppliers, a group that has long been a leader in automation in U.S. factories. The new plants for electric vehicles, batteries, and battery recycling, announced since the beginning of 2021, are expected to cost $160 billion, as per Atlas Public Policy, a U.S.-based research group working with automakers and environmental groups.
Material handling
Most of the robots ordered last year will be used for material handling, an extensive category that encompasses all types of movement and handling of goods inside factories and warehouses. Closure Systems International’s plant in Crawfordsville, Indiana, for example, recently automated the job of packing and sealing boxes at the end of the assembly line. The company produces closures for items such as soda bottles and food packages.
Auditor jobs to be automated
Next in line for automation are auditor jobs. Currently, workers called auditors check that specifications are met in small booths along the production line. Small robots will soon be installed to do the inspection work, according to Brad Bennett, Senior Vice President of Global Operations at Closure Systems International. The new machines will help avoid what happened during the pandemic, where the company struggled to find workers to keep the plant running at full capacity.
Avoiding layoffs
The installation of robots will not lead to layoffs, according to Bennett. The workers will move to other tasks, and the new machines will help the company avoid what happened during the pandemic, where the plant was running with 30% less capacity due to a lack of workers.
Robot orders amid layoffs of human workers
The adoption of robots by North American companies amid layoffs of human workers raises questions about the future of the workforce in the region. The labor shortage is driving companies to adopt automation, but a shift away from pandemic-era consumer behavior and supply chain problems may have influenced last year’s results.
The automotive industry, a long-time leader in automation in U.S. factories, was responsible for more than half of the robots ordered last year. The new plants for electric vehicles, batteries, and battery recycling are expected to cost $160 billion, as per Atlas Public Policy.
Material handling and auditor jobs are the primary areas where robots are being adopted. Closure Systems International’s plant in Crawfordsville, Indiana, is an example of a company that has automated material handling and auditor jobs, with no plans for layoffs. The installation of robots will help companies avoid what happened during the pandemic, where they struggled to find
