Through Timothy Aeppel,
In the first half of this year, North American corporations purchased a record number of robots as they tried to maintain factories and warehouses operational in the face of an exceptionally tight labour market and skyrocketing pay expenses.
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According to data gathered by the Association for Advancing Automation, companies placed orders for a record 12,305 machines valued at $585 million during the second quarter, representing a 25% increase over the same period last year. In conjunction with a robust first quarter, the North American robotics market recorded its greatest ever first half, according to the organisation.
Hence, Jeff Burnstein, president of the Association for Advancing Automation, often known as A3, stated, “Companies need to get products out the door; hence, they require additional automation.”
For example, over the next year and a half, Eaton Corporation PLC (NYSE:ETN) will put 150 different robots to work making electrical equipment in North America.
In the current tight job market, there are clear reasons for employers to want a workforce with more robots.Employers are bidding up pay since there are approximately two job openings for every jobless person. Total U.S. labour expenses, including pay and benefits, increased by 5.1% year-over-year in the second quarter, the largest annual increase since the Labor Department began measuring the metric in 2001.
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However, if robots are intended to increase worker productivity, this has not yet been demonstrated. In the second quarter, U.S. productivity decreased at its fastest annualised rate since 1948, when the government began tracking productivity.
One such reason is the COVID-19 pandemic-caused distortions. During the hardest days of the recession, a large number of people left their positions and are just now trickling back into employment. It is common for people to be less productive while switching occupations or employment within their previous sectors.
Also, most of the recent job growth has been in low-productivity service industries like leisure and hospitality. This may make it hard to see the progress robots may be making in other areas.
Burnstein of A3 stated that it takes time for businesses to utilise the potential of new machinery via its implementation. He stated, “There is a learning curve.”
This is especially true for industries embracing completely new technology, such as the automotive industry’s shift to electric automobiles. A third of the robots bought in the second quarter were bought by the automobile industry, according to A3.
Mike Cicco, chief executive officer of FANUC America, the U.S. subsidiary of the Japanese robotics company, says that half of his industry’s sales to automakers are intended for new electric-vehicle facilities.
“This is all investment for factories that won’t be running for a few years,” he said, so it’s not surprising that these robots haven’t helped boost productivity yet.
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The rush to add robots is part of a bigger investment boom as businesses strive to keep up with robust demand, which continues high despite the Federal Reserve’s decision to hike interest rates to combat inflation.
Knapheide Manufacturing Co. is among the corporations investing in new robots, with a new manufacturing line for flatbed truck bodies scheduled to be installed this year in its Quincy, Illinois, facility. The new line will feed steel components through an automated welding process using robots.
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The engineer directing the installation, Mike Bovee, stated that the new robots should help alleviate the chronic lack of welders. These labourers are currently recruited from as far away as Texas by Knapheide.
“We’ll always need as many welders as we can find,” he added, adding that they can be reassigned to other production areas at the 1,500-employee factory.
