Heading into 2025, the macroeconomic climate appeared relatively positive. Interest rates were expected to fall, global economic uncertainty had dropped to pre-pandemic levels, and automation vendors were reporting rising project leads.
However, U.S. tariffs disrupted this stability, triggering trade tensions and pushing uncertainty above pandemic levels. Steel and aluminum costs surged, inflating warehouse automation project prices. In May 2025, Interact Analysis downgraded forecasts for warehouse construction and automation spending.
A more optimistic forecast
Since our May release, global macroeconomic uncertainty has begun to ease. As conditions have stabilized, visibility into future market dynamics has improved, giving end users greater confidence to move ahead with large capital investments.
This shift has led us to adopt a slightly more optimistic view of warehouse construction and automation spending in our latest forecast. This does not imply that macroeconomic fundamentals have fully recovered – far from it – but we are notably less pessimistic than we were six months ago.
David Letter, CEO of Prologis, noted during the company’s Q3 earnings call that “[U.S.] customers have definitely become more desensitized to the short-term noise as they look at making long-term decisions.”
Warehouse vacancy rates, while still elevated, are showing signs of stabilizing. Colliers reported that vacancy rates climbed to 7.4% in Q3 2025, with clear indications that they are nearing their peak.
Meanwhile, net absorption rose to its highest level since 2023. Given the slowdown in new construction alongside rising absorption, we expect warehouse construction growth to strengthen toward the end of 2026 and into 2027.
Trends in Europe and Asia
In Europe, we are also seeing signs of recovery and a shift toward the “new normal.” After a weak first half of 2025, warehouse take-up rebounded in Q3, rising 24% quarter-on-quarter and 22% year-on-year, according to Savills.
A similar trend is emerging in China. Q3 warehouse construction activity was significantly higher than in previous quarters, with net new warehouse space reaching its highest level since before the pandemic, despite a relatively weak Q1 and Q2.
While a single quarter does not confirm a full recovery, it has prompted us to raise our forecast for China’s warehouse construction. It had been declining in recent years due to lower consumer demand and, more recently, trade tensions with the U.S.
These developments have led us to revise our warehouse construction forecast upward for 2026 and 2027, as more of the pent-up demand is now expected to materialize earlier in the outlook period. Consequently, our longer-term forecast (2028–2030) has been revised slightly downward, reflecting this shift in demand toward the earlier years of the forecast period.
How does this translate into warehouse automation investments?
To understand our updated forecasts for warehouse automation, it is useful to break the market into three phases: the previous year, the short-term forecast, and the long-term forecast. While 2024 performed better than expected, and we’ve lifted our short-term forecast, our long-term growth rate has been revised slightly downward, despite reaching a higher absolute market size by 2030.
Project completions accelerated towards the end of 2024, based on revenue data collected over the past six months as part of our primary research. Warehouse automation revenue grew by 1%, compared with the -3% decline we had previously predicted.
Vendor sentiment was weak in 2024, but overall market performance remained stable. However, this stability hides sharp sector differences: grocery grew by nearly 20%, driven largely by Symbotic, while parcel automation revenue declined by nearly 15%.
Looking ahead in the short term, our forecast for 2025–2027 has been revised upward due to three factors:
- A moderate increase in warehouse construction
- Higher steel costs being passed on to end customers
- Several large-scale investments from major end users
Our short- to mid-term forecast for warehouse construction has improved, reflecting stronger macroeconomic stability than six months ago.
Steel and aluminum tariffs introduced by President Donald Trump continue to drive higher steel prices. This has increased automation costs, resulting in higher projected order intake and revenue. In the U.S., we forecast 12% order-intake growth in 2025, with 6% attributable to price increases alone.
Major companies commit to automation
Alongside higher construction activity and elevated steel costs, several large-scale automation projects will shape the 2025 outlook. Amazon, Tesco, M&S, and Ahold Delhaize have committed to major automation investments despite weak macroeconomic fundamentals. As a result, we forecast 2025 warehouse automation order intake to rise from 1% in our May release to 7% in the latest projections.
Our short-term forecast tells two stories. Despite weak macroeconomic fundamentals affecting most automation vendors, we forecast market growth. Rising input costs and large-scale investments from key end users are driving this increase.
While we predict an absolute market size in 2030 that’s higher than our previous forecast, it’s important to note that our longer-term growth rate has come down, owing to two key factors. First, updated warehouse-construction projections indicate demand will be more front-loaded, leaving less pent-up demand later in the period.
Second, we forecast a slowdown in 2028 due to political uncertainty surrounding the U.S. election and its potential impact on trade and domestic policy.
China’s market remains in contraction, driven by weak economic performance and reduced investments from major e-commerce retailers such as Alibaba and JD.com. In the U.S., we forecast stronger growth, although rising steel prices will account for a significant share of this increase.
Europe shows a mixed outlook: The U.K. is set for robust growth led by the grocery segment, while Germany remains sluggish in the short to mid-term due to limited manufacturing investments.
Developments in mobile automation
Growth patterns diverged in 2025, driven by political and economic uncertainty and rising input costs. Shipment growth is forecast to slow to 18%, down from 24.5% in 2024.
In contrast, revenue growth is projected to rise to 24%, up from 22% last year. This disconnect reflects higher prices even as shipment volumes soften. The chart above illustrates this break in what is typically a strong correlation between revenue and shipment growth.
Despite short-term volatility, the long-term outlook remains strong. We forecast robust growth through 2030, driven by demand for scalable, flexible solutions—demand reinforced by today’s uncertain economic and political environment.
Competition between shuttle systems and mobile solutions is intensifying, led by higher throughput rates in tote-to-person systems such as Exotec and Hai Robotics. Historically, shuttle systems dominated the high-throughput segment (550+ presentations per hour).
In 2024, shuttles accounted for 70% of the high-throughput item-picking market. As tote-to-person and ultra-high-density storage systems improve, we forecast shuttles’ share to decline to 55% by 2030.
Regionally, China remains the largest market for mobile robots, accounting for most shipments. As adoption accelerates elsewhere, China’s share is forecast to fall to about 45% of shipments by 2030.
Because Chinese systems are priced lower, China’s share of revenue is significantly smaller and will continue to decrease as other regions scale up deployment.