Robot invasion hit a bump in 2023 as North American economy cooled

North American companies ordered fewer robots in 2023 due to economic concerns, resulting in the largest drop in robot orders since 2006.

North American companies ordered about a third fewer robots last year as worries about a slowing economy and higher interest rates made it harder to justify buying the advanced machines, the first hiccup in five years in what has been a steady progression of the robot invasion of the region’s workforce.

“When the economy isn’t great, it’s easier to delay purchases,” said Jeff Burnstein, president of the Association for Advancing Automation, an industry group that tracks robot orders.

Companies bought 31,159 robots in 2023, a drop of 30% over the year before, the largest drop in percentage terms since 2006 and largest drop ever in net units, according to the group, known as A3. The pullback occurred in automotive-related industries — which made up about half of the market last year — as well as other sectors such as food and metals manufacturing.

Orders in the fourth quarter hit 7,683, an 8% drop from the same period a year earlier.

Slowing robot orders came even as some companies announced initiatives to develop more advanced versions of the machines. Robotics start-up Figure said last month it forged a partnership with Germany’s BMW to deploy humanoid robots in the carmaker’s South Carolina factory to take on certain physical tasks. Electric-vehicle maker Tesla also has a humanoid robot in development.

But for many robot makers, selling existing machines has been hampered by worries about a softening economy and the excess inventories built up during the COVID-19 pandemic. Universal Robots, a Danish maker of small, flexible robots, recently reported its revenue fell 7% last year, to $304 million.

Universal’s President, Kim Povlsen, told investors: “2023 was characterized by a difficult economic and business environment for many of our core customers with global industrial activity slowing in the first half of the year.”