Orders for warehouse automation technology are expected to decline this year in line with an expected drop in new warehouse construction, according to a revised market outlook from research company Interact Analysis, released this week.
Researchers cited volatility and uncertainty in the global economy for the downward revision. The adjustment accounts for excess warehouse capacity built during the pandemic, a decline in e-commerce rates, and an overall slowdown in the global economy, according to Ash Sharma, managing director and lead for the company’s robotics and warehouse automation division. “Our updated forecasts show the construction of new warehouses is projected to decline. In comparison to the forecast made in Q3 2022, we estimate that 6,700 fewer warehouses will be built by 2027. This reduction translates to a decrease of 1.4 billion square feet of warehousing space,” Sharma wrote in the company’s May 18 update. The forecast predicts a corresponding decline in fixed warehouse automation, with expected annual revenues dipping below 2022 levels. The decline will be temporary though, as the researchers said they expect warehouse construction to rebound in 2025, spurring demand for new systems. The report showed a downturn in automation demand among consumer-facing industries such as grocery, apparel, and general merchandise that began in 2022, driven by decelerating e-commerce. Those segments had been the major drivers of fixed warehouse automation investments, according to the report. In contrast, upstream industries such as food and beverage and manufacturing are expected to see increased demand for such systems–at least temporarily, according to the report. “Manufacturers are investing in automation due to two primary factors: near-shoring and government incentives provided in regions like the Americas and Europe,” Sharma wrote. “The growth rate of food and beverage automation also increased in 2022, with many consumer packaged goods (CPG) companies investing in new facilities. This upward trend is expected to continue in the short term.” Despite the slowing outlook for fixed automation, the revised report points to an uptick in demand for autonomous mobile robots (AMRs) and automated guided vehicles (AGVs), especially automated forklifts. The forklift outlook is due to higher-than-expected order intake in 2022 and more rapid adoption of the technology–especially in the United States where larger fleet sizes are typically adopted, according to the report.
ALAN has been helping to connect nonprofits with logistics resources since 2005. Here supplies are packed up for transport and distribution to Hurricane Maria survivors in 2017.Photo courtesy of ALAN
The nonprofit Unity in Disasters needed 30 pallets of food transported to Jackson, Miss., to help Hurricane Ida survivors in 2021. ALAN was on hand to coordinate a response.Photo courtesy of ALAN