A recent Robotic Industries Association (RIA) report says robotics companies saw orders jump 40% in units in the first half of 2010. However, given the state of things during 2009, that increase, while good, isn't anything to write home about. The RIA (www.robotics.com) reported a 31% drop in robotics sales in Q1 of 2009, and a 30% drop through Q3 2009. The full year 2009 saw a 25% drop in robotics sales, after a slight comeback in Q4.
A total of 6,316 robots valued at $411.4 million were ordered by North American companies through June, a rise of 40% in units and 48% in dollars over the same period in 2009. When orders to companies outside of North America are included the increases are even larger, up 54% in units and 62% in dollars, said the RIA report.
"In North America, the biggest gains came in orders by non-automotive companies, where units rose 51%," said Jeffrey A. Burnstein, President of RIA. "This is a very positive sign for our industry as it continues to expand into a wide-range of industries such as semiconductor, electronics and photonics, food and beverage, plastics and rubber, consumer goods, and life sciences. Each of these market segments posted substantial gains in the first half of 2010, while automotive orders also grew 30%."
Given that the plastics industry has been the bearer of good news over the past month (see the ISM Manufacturing Report for July), robotics suppliers to that industry should also be doing well.
"Percentages are tricky," says John Herron, President of LaBelle Industrial Sales in El Paso, Texas. LaBelle represents a number of industrial equipment suppliers including robots from Yushin America and molding presses from Toshiba, among other types of equipment. "Our business is up over 30% this year, but that's still only half of what it used to be," says Herron. "It remains to be seen what happens over the next five months."
LaBelle's territory covers the southern tier states and Mexico. Herron is finding that caution among buyers is still strong. "A lot of people are not willing to part with their cash, and they're not going to place an order until they've got new business coming in," says Herron. "And a lot of people still aren't convinced they need a robot. The large manufacturers use robots and automation is the ultimate future of the Americas. But it's expensive, so even buying a robot for $30,000 is something about which they think twice. But, business is definitely better than last year, but not better than before the [recession] started."
Chris Parrillo, National Sales Manager for Yushin America (www.yushinamerica.com), concurs. "We're seeing a huge growth over last year, but we're still 10-20% behind where we were in 2006 and 2007," he states. "However, we're seeing a recovery, and quoting and booking of new business is up, primarily in the automotive industry which really is blossoming this year compared to where it was last year - it was non-existent. Other industries that are strong include medical, consumer packaging, the semi-conductor business, and wind energy, and other technologies are presenting new opportunities for us."
LaBelle's Herron adds that automotive is the biggest industry he covers in Mexico. "The appliance and medical industries are kicking in, but those two combined can't replace automotive , and that hasn't fully come back. There's still a lot of excess capacity."
Jim Healy, VP of sales and marketing for Sepro America LLC, (www.seproamerica.com) says Sepro is also having a good year so far. "It's much rosier than last year, and the level of activity has increased substantially over last year," says Healy. "I think everyone is feeling more positive. Sales are up, quoting is up, and the level of new customers is up. A lot of positive things are happening for Sepro. Globally things are a lot better this year than this time last year."
There are several contributing factors to this year's growth, not the least of which is labor. Yushin's Parillo notes that many companies have reduced their labor forces and are still reluctant to make new hires. "They're nervous and the economy is still fragile," he says, "and a lot of molders are not staffing back to pre-recession levels, but they want to grow. Consequently, molders out there are quoting new projects with automation in mind."
Another factor driving robot purchases is the replacement of older robots. Parillo points out that "we're on the cusp" of being two decades old for widespread robotics use. "That means that many robots are 10 and even 20 years old, so we're seeing demand for replacement robots coming on. This year and next we expect a lot of new opportunities with companies adding automation for the first time as well as replacement robots."
Sepro's Healy sees much the same picture. "People who had not had robots before are automating for the first time, and we see labor issues creating this demand, as well as a desire for consistency and repeatability in the molding environment."
Whatever is driving sales, the robotics suppliers are grateful for the upturn. "Optimism is higher now than this time last year," says Healy.
The RIA's Burnstein concluded that while the 2010 numbers are looking good, given the significant drop in 2009, "We still have a long way to go before the industry is back up to pre-recession sales levels, but I'm very encouraged that we're headed in the right direction." —Clare Goldsberry