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Recently, the International Federation of Robotics (IFR) released a report indicating that the North American robot market experienced robust growth in 2022. The total installation of industrial robots in the manufacturing industry reached 41,624 units, marking a 12% year-on-year increase.
Automotive Industry Drives Industrial Robot Applications
The automotive industry remains the primary sector for industrial robot applications. Companies in the United States, Canada, and Mexico installed a combined total of 20,391 industrial robots, representing a 30% growth compared to 2021.
U.S. Automotive Demand Soars
In the United States, the demand for industrial robots from automakers and parts manufacturers grew by an impressive 48% in 2022. This trend reflects a cyclic pattern, with demand bouncing back after several years of contraction. The installation count increased from a peak of 15,397 robots in 2017 to 9,854 robots in 2021, and then skyrocketed to 14,594 robots in 2022.
Canadian Installation Trends Linked to Automotive Industry
Canada heavily relies on the automotive industry for its industrial robot installations, with 40% of robots being deployed in this sector. Consequently, installation figures are significantly influenced by investments in the automotive industry. In 2022, due to a 36% decline in automotive sales, only 1,258 industrial robots were installed, falling below the pre-COVID-19 level of 1,897 robots in 2019. The installation count for industrial robots in automotive parts plummeted by 45% to 995 robots, while engine and vehicle installations experienced a 99% growth, reaching 263 robots.
Mexican Installations Driven by Automotive Industry
In Mexico, the installation of industrial robots is primarily determined by the automotive industry, accounting for 66% of all installations. In 2022, there was a 16% increase, reaching 4,222 robots, marking the second-highest level since the record peak of 4,805 robots in 2017.
Industrial Robots in Non-Automotive Industries in North America
Beyond the automotive industry, other sectors in North America installed over 4,000 industrial robots in 2022. These industries include electronics and electrical, which experienced a 28% growth; metals and machinery, which saw a 9% decline; and plastics and chemicals, which experienced a 4% decline. Each of these industries accounted for a 9% market share of the total industrial robot installations in 2022.
Expanding Demand for Industrial Robots in the United States
In 2022, the U.S. automotive industry witnessed significant growth in demand for industrial robots. According to the Association for Advancing Automation, more than half of the orders came from automobile companies. The investment in new electric vehicle, battery, and recycling factories has already reached $160 billion since the U.S. announced its support for electric vehicle policies in 2021.
The primary driver for substantial robot purchases is the increasing labor shortage in the United States. Over the past year, the U.S. unemployment rate has consistently remained low, reaching its lowest point since 1969 based on the latest non-farm data released in January.
Jeff Burnstein, President of the Association for Advancing Automation, stated that there seems to be no sign of the labor shortage easing in the market. Faced with the lowest unemployment rate since 1969, many companies view automation as a quick solution to address the problem. Additionally, some companies have placed extra orders to ensure they obtain the necessary parts amid concerns about previous supply chain issues.
COVID-19 Impacts and Labor Shortage in the U.S.
The COVID-19 pandemic has had a more significant impact on the U.S. labor market than anticipated, and its duration has exceeded expectations. According to data from the U.S. Department of Labor, as of December 2022, there were 11.01 million job vacancies in the United States, with a job vacancy rate of 6.7%. This clearly indicates a severe labor shortage in the country.
Rising Wages and the Potential of U.S. Robot Market
The ongoing labor shortage has led to a significant increase in wages in the United States. Data from the Department of Labor shows that labor costs surged by 5.7% in 2022, marking the highest annual increase since 1982. The labor shortage and rising labor costs have compelled businesses to consider the use of robots as a substitute for human workers.
Interestingly, the current adoption of robots in the United States is relatively low. The density of manufacturing robots in the country stands at only 274 units, ranking ninth globally and lower than China’s 322 units. This unexpected ranking not only highlights the potential for significant growth in the U.S. robot market but also presents an opportunity amid the persistent labor shortage.