The global outlook for warehouse automation investment was revised down this week, mainly due to challenging economic conditions in some parts of the world. That’s according to research from British consulting firm Interact Analysis, which released a mid-year report Tuesday updating its global warehouse automation forecast from last fall.
The new report reflects data from the first and second quarters of 2024, which reveals negative changes to the macro-economic environment over the past six months. The forecast, which the firm expanded out to 2030, shows a more pessimistic outlook for global warehouse construction over the next six years and a corresponding decline in anticipated warehouse automation investments compared to its November 2023 report. The November report predicted revenue growth well above $30 billion for this year, but the update scales that back to closer to the $30 billion mark, for example.
The change largely reflects regional economic differences, with investment declines expected in Europe and Asia Pacific, offset by expected increases in the Americas. According to the research, warehouse automation revenue forecasts for the EMEA (Europe, Middle East, and Africa) region have decreased slightly, driven largely by conditions in the United Kingdom and Germany.
“We actually see higher revenue growth in Eastern Europe driven by an expected increase in capital investments from manufacturers (both Western European manufacturers off-shoring to Eastern Europe and Chinese producers setting up shop in Europe),” Research Manager Rueben Scriven wrote in the report. However, the report also notes continued economic uncertainty across Europe as a factor in the slower growth overall. Scriven also said that warehouse automation revenues are expected to contract significantly in APAC (Asia-Pacific), driven by a slowdown in investments from China. “The housing crisis in China has led to decline in consumer spending. As a result, we’ve seen e-commerce retailers and express parcel operators pausing their investments, resulting in a fairly significant contraction in investments,” he wrote. Conditions look better in the Americas. Warehouse automation revenue forecast projections for the United States have increased compared to the company’s November 2023 forecast, mainly as a result of higher consumer spending, improved sentiment toward the economy, and “Amazon starting to invest again” according to Scriven. The report also highlights a slowdown in expected revenue growth for mobile robots, reducing its global revenue forecast for 2027 by $2 billion to a projected market size 13% lower than predicted last fall. Main drivers include weaker demand and higher pricing pressure in China, longer sales cycles from third-party-logistics services (3PL) providers, and weaker revenue growth for shelf-to-person autonomous mobile robots (AMRs). Scriven added that despite the slowdown, “our outlook for the industry is still extremely positive with the underlying drivers of growth remaining strong.”
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