I like the methodology of Interact Analysis industrial market research better than any I’ve seen so far. At the end of the year, they’ve flooded me with reports. Following are summaries from several of the latest ones including industrial machinery, global machinery production, German manufacturing, and industrial robots.
A Square Root Recovery For Industrial Machinery?
At times of economic turbulence, machinery markets get hit as consumer goods manufacturers slash spending. As we move into the post-pandemic era, the picture for machine builders is mixed. A recovery is underway. But it is likely to be a so-called square root recovery. In reality, this means a lasting slowdown that looks like an inverted square root – a huge and sudden dip, followed by a much slower and more protracted climb.
If we consider order intakes alone, the machinery recovery is a classic V-shape: end-users, having paused spending during the pandemic, are now ordering machinery in large quantities. The problem is that OEMs cannot meet this demand due to supply chain snarl-ups depriving them of vital components and semiconductors, and also due to there being simply too many orders coming in at once. The situation is ironic since, in the main, the major end-user manufacturers were able to keep producing as normal during the pandemic – only pausing planned machinery upgrades out of caution.
Full Recovery For Global Machinery Production In 2021, As Sector Size Surpasses 2019
This is an analysis by CEO Adrian Lloyd.
Our research shows that the global machinery market was worth $1.98 trillion in 2020. This constituted YoY growth of about -6%. But we expect to see a 6.2% rebound in 2021 up to $2.11 trillion. Materials handling equipment is the largest segment, with a 2020 value of $275 billion. Our forecasts for the total machinery sector out to 2025 put the three highest CAGRs as mining machinery (5.3%), farming machinery (5.1%) and textile machinery (4.5%). Multi-industry machinery will have a CAGR of 3.8% over the forecast period, with materials handling equipment performing particularly well within that category (CAGR 4.7%), owing to the booming warehousing and logistics sectors.
German Manufacturing On The Mend
Another analysis from Lloyd.
Our updated manufacturing industry output research forecasts global growth of 7.6% for 2021. This is a much smaller recovery compared with the one we witnessed in 2010, when manufacturing output grew by 16% following the 2009 depression. The hangover from the pandemic has manifested itself in a number of specific ways. Supply chains have been badly disrupted, transport and raw material costs are up, and there is a major labour shortage in many countries. Additionally, reciprocal pressure (i.e. a high recovery rate in economies that experienced sudden economic declines in 2020) means that the current projected 2021 growth rate is not a good indicator for the long-term.
But German manufacturing has now to weather the latest COVID-19 wave. Hopefully the experience of 2020 will stand the sector in good stead. In line with the established cyclical patterns caused by fluctuating waves of demand across our MIO forecast regions, the next contraction for German manufacturing is forecast for 2023.
Industrial robot component revenues to exceed $9.3 billion by 2025
New research shows that the market for industrial robot components will enjoy strong double digit growth in 2021, marking a clear turnaround after two years of disruption. However, 2021 market growth in revenue terms can be partially explained by major price increases in key components and raw materials, as well as supply chain issues and general inflationary pressure.
The key components markets covered by the report – motors, drives, gearboxes, controllers, teach pendants, sensors, end effectors, and machine vision – are all forecast for growth of varying degrees. Machine vision and end effectors will see the strongest performance as a result of particularly strong growth in the complex robotics systems that require these components. End effectors, which is the largest individual component market, will enjoy above average growth right out to 2025, by which time the sector will be worth more than $2.5 billion. Meanwhile, the combined market for motors, drives, and gearboxes will exceed that of end effectors, although a high proportion of these components are manufactured in-house by robot manufacturers themselves.
Industrial Robot Component Manufacturers Should Target Cobots
Finally, here is an essay by Tim Dawson of Interact Analysis.
But we are seeing a strong 2021 rebound as end customers resume much-delayed industrial automation projects. Beyond 2021, although activity will not be so frenzied, we predict continued strong growth, not least because the experience of operating factories along social distancing lines has made even the most conservative production line managers think hard about the potential that automation offers. By 2024, the market for industrial and collaborative robots should achieve its previous 2018 revenue peak of $10.5 billion, with 410,000 units shipped.
While the overall industrial robot market is forecast to see annual growth of the order of 4% – 5%, the collaborative robot sector is expected to enjoy 15%-20% year-on-year growth. We are seeing a trend towards smaller, lower payload robots, as industries such as electronics continue to automate, and new industries such as battery manufacturing and PV manufacturing increasingly come on stream. SCARA robots with a payload usually of <10 kg, for example, are already the most widely used robot solution in the electronics sector, and have a broad range of applications, including material handling, assembly, and inspection. This clear trend towards smaller robots will heavily impact the robot components sector.