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2025 proved to be a highly turbulent year for the warehouse automation market, shaped by elevated economic and political volatility stemming from U.S. tariffs and shifting foreign policy, according to Interact Analysis.
The competitive landscape underwent notable disruption, with several high-profile vendors experiencing distress. Attabotics filed for bankruptcy, while others pursued strategic divestments or group closures such as Zebra’s robotics division.
Despite these challenges, order intake in 2025 grew at a pace that significantly exceeded previous expectations. Major end-customers, including Amazon, Tesco, and Marks & Spencer, whose large-scale investments generated a substantial surge in market activity, drove this growth.
Three key factors are contributing to this sharp acceleration in order growth. First, rising raw material costs (particularly steel and aluminum) pushed automation system prices higher. This inflated order intake in nominal dollar terms.
Second, a concentrated set of large investments from global retailers had an outsized impact on overall market demand.
Finally, while tariff-related uncertainty dominated the first half of the year, the second half saw a clear easing of anxiety, as reflected in the Economic Uncertainty Index. This shift unlocked significant pent-up capital, leading to a wave of orders toward the end of the year.
In summary, 2025 was a tale of two halves: subdued fundamentals and cautious capital expenditure across much of the market, contrasted with aggressive spending by a small group of major players, which sustained aggregate industry demand.
Looking ahead to 2026: A more positive picture
Heading into 2026, we expect the disconnect between a weak macroeconomic backdrop and strong underlying demand for warehouse automation to narrow as broader economic conditions improve. While growth in 2025 was driven almost exclusively by a handful of large customers, 2026 should see demand broaden across both large enterprises and mid-sized companies.
Lower interest rates, particularly from the U.S. Federal Reserve and the European Central Bank, will support this shift, in part.
In addition, an influx of tax refunds to consumers and businesses in early 2026 from the “Big Beautiful Bill” could stimulate demand for goods in the U.S. This will increase pressure on supply chains and warehousing operations. This, in turn, should function as a catalyst for additional automation investment later in the year.
Warehouse vacancy rates, which have risen gradually since late 2022, appear to have plateaued and are expected to decline again. Falling vacancy rates will push rents higher and encourage new warehouse construction.
However, the impact of greenfield development on automation order intake is more likely to materialize in 2027 rather than 2026.
In China, conditions are beginning to improve, although the economy continues to face structural challenges. Both the International Monetary Fund and Goldman Sachs have raised their gross domestic product growth forecasts for 2026, citing improved trade relations and the front-loading of stimulus tied to the country’s upcoming 15-year plan, which focuses on boosting domestic consumption.
While Interact Analysis’ projected order intake growth for 2026 is slightly lower than in 2025, the composition of demand is likely to be more balanced. Growth is expected to be more broad-based, rather than driven by sharp spikes in order intake from a small number of customers. This shift will be reflected at the vendor level.
In 2025, a small number of automation suppliers experienced exceptionally strong growth. However, 2026 is likely to deliver more evenly distributed performance, with most vendors achieving modest but positive growth.
Supply chain resilience is a safeguard against turbulent geopolitics
Geopolitical uncertainty has increasingly become the status quo, and companies are showing greater resilience to foreign policy shocks. This is evidenced in the muted reaction of the S&P 500 to events such as the Venezuela regime change and renewed tariff threats toward Europe tied to White House negotiations over Greenland.
A key source of this resilience is the continued strengthening of supply chains, a priority since the COVID-19 pandemic. As a result, adoption of flexible automation technologies that allow companies to adapt rapidly to external shocks is expected to continue.
While this trend is not new, persistent geopolitical turbulence is likely to accelerate it further, reinforcing the strategic value of flexible automation in maintaining operational agility.
Interact Analysis identifies potential risks for 2026
While our baseline view for 2026 presents a more optimistic outlook, there are several factors that could materially alter the trajectory of the warehouse automation market.
Supreme Court tariff ruling
A Supreme Court ruling on the legality of Trump-era tariffs represents one such catalyst. If the court rules the tariffs are illegal, the administration is likely to pursue alternative tariff mechanisms, although these would be unlikely to apply retroactively.
While the president has not explicitly committed to refunding tariffs, the Department of Justice has stated it would comply with a Supreme Court order to do so.
Notably, U.S. Customs and Border Protection has already launched an upgraded electronic refund platform ahead of the ruling. This has prompted speculation that the government is preparing for a surge in refund claims.
While any reimbursement process is likely to be prolonged and legally complex, a large-scale refund could result in a windfall for affected companies. This could potentially translate into elevated capital expenditure.
Memory shortage
A potential global memory shortage is emerging as demand for advanced DRAM and high-bandwidth memory has grown far faster than new manufacturing capacity. The rapid build-out of AI data centers, the accelerated adoption of memory-intensive workloads, and manufacturers’ cautious investment following previous boom-bust cycles have tightened supply.
While this is unlikely to significantly affect warehouse automation overall, it poses a disproportionate risk to systems with higher levels of edge computing. This includes autonomous mobile robots (AMRs) that rely heavily on onboard navigation software rather than cloud-based fleet management systems.
That said, it is unlikely we will see supply disruptions, but rather inflationary pressures instead. With tariffs already inflating selling prices for robotics and automation, this could be an additional factor driving price rises.
Contradictions and challenges for warehouse automation
The warehouse automation market emerges from 2025 marked by contradiction. Macroeconomic fragility and geopolitical disruption on one hand, and resilient, investment-driven demand on the other.
While a small number of large players carried the market through a challenging year, the foundations for broader-based growth are forming as the industry enters 2026. Lower interest rates, improving confidence, and sustained pressure on supply chains point to a more balanced expansion ahead.
However, the outlook remains sensitive to policy decisions and geopolitical developments. Companies that prioritize flexibility and resilience will be most immune to the potential geopolitical shocks that could occur in 2026.