Surpassing previous records set six years earlier, the North American robotics market reached new heights in 2005 aided by an improving manufacturing economy and broader, cross-market recognition of the operational flexibility and utility robots can deliver, according to a recent report by the Robotic Industries Association (RIA).
Although the RIA remains optimistic about long-term growth prospects, severe structural problems in the automotive business -- which remains the largest user of robotics technology -- could have a chilling short-term effect on the domestic robotics industry, the association acknowledged.
A record total of 18,228 robots valued at $1.16 billion were ordered by North American manufacturing companies last year, an increase of 23% and 17% in units and dollars, respectively, over 2004, the RIA reported. Including orders placed by companies outside of North America, 19,445 robots valued at $1.22 billion were ordered from domestic robotics suppliers in 2005, gains of 21% and 15% in units and dollars, respectively, over last year, the RIA said.
Domestic robotics shipments also reached a high water mark in 2005, according to RIA data gleaned through a survey of association members. Approximately 19,594 robots valued at $1.18 billion were shipped to companies in North America during the year. Factoring in shipments to companies outside North America, some 20,906 robots valued at $1.24 billion were shipped last year, representing gains of 45% and 28%, respectively, in units and dollars, the Ann Arbor, MI association noted.
Jeff Burnstein, vice president of marketing for the RIA told Managing Automation that the market turnaround of the last few years is being driven by pent-up demand for robotics following the prolonged manufacturing recession and a greater appreciation for the operational efficiencies the technology can engender. "Following the stock market collapse and 9/11 [there was] a depressed market for robotics," he said. "Now with the economy improving, there is a greater realization around the things robotics can [help manufacturers] achieve."
Approximately 158,000 robots are now installed in American manufacturing operations, placing the U.S. second to Japan in robot usage, the RIA estimated. (Click here to see a select list of robotics suppliers.)
Helping to fuel the gains was an increased appetite for robotics within the automotive industry. Automotive manufacturers and components makers increased their robotics orders by 49% and 14% in 2005, respectively. Combined, these two sectors accounted for 70% of new robot orders in 2005, the RIA estimated.
"Automotive purchasing tends to be cyclical, so we would not normally expect to see a repeat of this rapid growth in 2006," said Donald A. Vincent, the RIA's Executive Vice President, in a prepared statement.
However, new robotics orders in North America declined two percent in the fourth quarter compared with the year-earlier period. This coincided with the publicized struggles of the Ford Motor Co. and General Motors Corp., which reached a crescendo during this period with revelations of expected plant closing and staff cut-backs.
"We agree whole-heartedly that the growth of the robotic industry ... will continue," noted a spokesman for Kuka Robotics Corp. (Clinton Township, MI), a leading robotics supplier. "The [fourth-quarter industry] slow down, and this is my personal opinion, came as the automotive industry's problems [became clear] and word trickled down to the general industry, non-automotive segment. There may have been some hesitation [to project growth] just as the RIA surveys went out."
The automotive industry's woes aren't domestic robotics suppliers' only concern. The continued offshoring of manufacturing operations also has domestic robotics suppliers somewhat worried, the RIA acknowledges. Will offshore operations in China even need robotics, since they tend to rely more on low-cost human labor, Burnstein noted. And, even if they do require robotic automation, will these companies purchase the technology from North American robotics -- vendors or buy it locally, he added.
Despite near term caution, the RIA contends the industry's long-term growth will be fueled by the growing realization that robotic automation can help domestic companies survive and prosper in an increasingly competitive global manufacturing environment.
Growth in the use of robotics technology beyond traditional strongholds -- like automotive and related segments -- can only help the industry's cause, the RIA said.
For instance, robot orders soared 30% in the life sciences, pharmaceutical, and biomedical industries in 2005. "As companies learn more about the benefits of robotics in industries where they may currently not be in widespread use, we can expect to see long-term growth," Vincent said.