August 25, 2023
ROBOTICS AND AUTOMATION
The US has been experiencing a labor shortage which is expected to continue. How could robotics and automation help offset the labor issues companies are facing? Tune in to a new episode of TrendsTalk to find out!
The below transcript is a literal translation of the podcast audio that has been machine generated by Rev.
Hi everyone. My name’s Taylor St. Germain, and welcome to this episode of TrendsTalk. Today, I wanted to discuss robotics and automation and the need for robotics and automation. Currently, today, we have a labor shortage here in the United States, and if you’ve listened to ITR in the past, you’ve likely heard that we expect this labor shortage to continue. A number that really highlights this labor shortage or ratio rather, we look at the number of unemployed persons per job opening. That number is currently 0.684 right now. So what does that number mean? That means, for every one open job, open position in this country, we have 0.68 people. That just highlights the fact that we do not have enough people in the United States to fill all of the job openings out there, and so, automation, innovation, and robotics in particular is likely a way that we will be able to offset that labor shortage.
I know there’s a thought process out there that robots are going to take our jobs and take certain industry jobs here in the United States, but really, we need robots, or else we’re going to find ourselves at a continuous capacity constraint, from now moving forward, especially as we look at the second half of this decade. And it’s clear that businesses across the country understand this trend, based on the increased investment that we’ve seen in robotics, as of late. If you look at robotics shipments, so that’s a deflated series, just a pure shipments number, that’s currently at a record high, and although that shipments’ record high, we’re starting to see the pace of growth slow with some macroeconomic weakness into higher interest rates. And if you look at the value of these robotics shipments, again, now we’re including inflation impacts, that’s at a five year high, and again, slowing, giving some of the higher interest rates.
But still, I think this really highlights that there’s a constant labor challenge in this country, a constant labor shortage, and organizations are taking the opportunity and have been throughout the last few years to be investing more in robotics to offset this labor shortage. When we talk with our clients here at ITR, the number one challenge we often hear, the most common number one pain point, is labor. So I think that’s one of the primary reasons we’ve seen such significant investment here in the US in robotics, and it’s likely that that will continue, especially as the Federal Reserve looks to be dropping interest rates in 2024 and 2025. Like I mentioned, it’s really no surprise that there’s a slowdown, in terms of capital investment, in terms of investment in robotics, because of those higher rates. But as those rates come down in ’24 and ’25, we’ll likely see the increased investment, the pace of investment, pickup, in terms of robotics and other forms of automation and innovation.
One industry I like to highlight, especially given the correlation, is the automotive market. When we overlay North America robotics shipments with North America light vehicle production, which is our trends report automotive baseline series for North America, you can see there’s a clear correlation between the two, in that, when light vehicle production is growing or expanding, we see the same for robotics shipments. And there’s, again, tight correlation between the overall business cycles between automotive and robotics. So it’s clear, industries like the automotive industry have put a strong emphasis on investing in robotics. Another relationship that we find interesting, fascinating, but not surprising, is by overlaying North America robotic shipments with US total manufacturing job openings. If you look all the way back to the financial crisis, 2008, 2009, coming out of that financial crisis, you’ve seen a significant uptick in the number of manufacturing job openings here in the United States.
And if you overlay the robotic shipments value, you can see the trend is very similar in robotics, in that the more job openings we have in manufacturing, the increased investment that we have in robotics. So there’s a clear correlation going on here. In order to offset this tight labor market, we’ll need to see continued investment in automation, innovation, and robotics. Robotics is going to open a lot of new jobs, a lot of new opportunities out there, so I hope everyone’s embracing this trend, rather than fearing the trend. I hope you found this information helpful. My name’s Taylor St. Germain with ITR Economics on this episode of TrendsTalk, and I’m looking forward to seeing you on the next one.