According to research that Interact Analysis released earlier this month, the mobile robot market grew by 27% in 2023 to reach $4.5 billion globally. This strong revenue growth came despite tough conditions caused by a large backlog from preceding years.
However, we have cut our forecast for 2024 because of a slowdown in China. Despite this, we believe that growth in the U.S. market will help drive global revenues to reach $5.6 billion for the year.
While we still expect strong demand for automated guided vehicles (AGVs) and autonomous mobile robots (AMRs), our 2027 projections are now approximately $2 billion lower than before. This is almost entirely attributed to slower demand for order-fulfillment AMRs.
Our forecast for material transport mobile robots is broadly unchanged since the last report. This part of the market is relatively more mature and predictable.
On the other hand, fulfillment AMRs are still an emerging and nascent product, which makes long-term growth harder to predict. However, the industry has now grown to a size where it is no longer immune to the wider economy.
Previously, project sizes (and hence investments) were much smaller, and customer projects were abundant. This meant the AMR market was in effect too small to be impacted by wider economic performance and could still grow effectively through economic slowdowns. We now appear to have hit the inflection point where that is no longer the case.
Despite the points covered above, our outlook for the industry is still extremely positive, with the underlying drivers of growth remaining strong. In 2027, we predict that annual revenues for mobile robots will surpass $14 billion.
Regional dynamics vary widely by country
Our outlook for China has reduced considerably. Its economy continues to slow, dragging down investment in automation in the short term. As a result, we have reduced our 2024 and 2025 forecasts.
Conversely, Interact Analysis has tempered its expectations for price erosion in China, as both costs and prices have already sunk to such a low level that there is now little room to drop further.
In the U.S. market, particularly within the third-party logistics (3PL) and retail sectors, we have heard that customers are delaying signing off on new projects. It could be that companies are taking a “wait and see” attitude to the upcoming elections.
Underlying demand and the intent to deploy robots remain robust. However, projects are taking much longer to gain the necessary approvals and approvals to proceed. This is partly because projects are getting much larger, and therefore the expense requires greater scrutiny further up organizations, and partly because a post-COVID correction has alleviated the need to implement automation as quickly as possible.
Still, Interact Analysis’ longer-term outlook for the U.S. remains robust, and we expect it to be a major driver of global mobile robot growth over the next five years.
Food and beverage, healthcare, and manufacturing of durable goods such as semiconductors and automobiles are commonly mentioned as the end sectors driving growth for AMR and AGV vendors. This is not surprising, given the activity in new factories because of the Inflation Reduction Act and the CHIPS and Science Act, as well as the automotive sector’s shift to electrification.
Growth in China has slowed temporarily, but the U.S. market is robust. Source: Interact Analysis
Shelf-to-person AMR demand is slowing, finds Interact Analysis
Once the major driver of AMR growth, revenue growth has slowed for Kiva-inspired shelf-to-person (S2P) robots, found Interact Analysis. Global revenues rose by “only” 12% in 2023, and it is forecast to be one of the weakest segments for the mobile robot market in 2024.
This is for three major reasons: First, average selling prices have dropped considerably. Companies like HIK Robot have benefitted from a low-cost supply chain and driven down prices.
Second, customers are shifting to other systems such as totes-to-person and, to some extent, cube-based systems, which offer greater storage density.
Third, the slowdown in warehouse construction has reduced the overall opportunity for these robots. Such greenfield buildings tended to be the most suitable for shelf-to-person AMRs.
Interact Analysis forecasts strong revenue growth for most other mobile robot products. Most notably, the research firm forecasts that case picking, person-to-goods, totes-to-person, and forklift robots could grow by more than 30% in 2024.
Case picking is an emerging type of robot with relatively few vendors, however major customers are now adopting them in warehouses, and the potential opportunities for the market are huge.
Our analysis of warehouse throughput and labor estimates that close to 90,000 full time equivalents (FTEs) were required for case picking in the U.S. alone in 2022 and that 36 billion cases were picked during the year. This is a substantial amount and demonstrates that the market opportunities for case-picking robots are also enormous.
While person-to-goods has seen delays in customer rollouts affecting order intake in 2023 and 2024, revenue growth is somewhat protected by the robotics-as-a-service (RaaS) model that is often implemented.
Similarly, automated forklift growth is less susceptible to short-term economic dips due to the long commissioning timescales, huge backlog, and multi-site (and often multi-country) contracts that customers have signed with vendors. As a result, we expect steady 20% to 30% annual growth for automated forklifts.
While S2P revenue growth has slowed, other robot types are still in high demand. Source: Interact Analysis
Interact Analysis remains bullish on mobile robot market
Despite some reductions to our forecasts for mobile robots, our outlook for the industry is still extremely positive. The underlying drivers of growth remain strong.
Corporations have by and large accelerated their automation plans, with the aim of reducing reliance on human labor. As such, demand for mobile robots remains strong across the board. The shortage of labor continues to be the biggest driver of demand for mobile robots, and its impact is only becoming more acute.