The overall automation market in 2022 performed poorly, and the overall automation market in the first half of 2023 continued the downward trend in the fourth quarter of 2022, and industry demand continued to be sluggish. The following will take you to review the automation market performance in the first half of 2023, analyze the development trend in the second half of the year and forecast the overall automation market growth rate in 2024 and 2025.

01The continued downturn in the automation market

The overall market size of automation in the first half of 2023 was 151.9 billion yuan, down 2.4% year-on-year; In the first quarter, the market size of automation was 79.5 billion yuan, down 1.9% year-on-year; The size of the automation market in the second quarter was 72.4 billion yuan, down 3.1% year-on-year. It is expected that in 2023, the overall market is still in the recovery stage, and some demand realization is mainly met by the channel side, which actually brings limited performance growth momentum to the manufacturer side. In addition, most industries do not see obvious growth points at present, and the overall market demand continues to decline, and the whole year will show a lower state than 2022.

The overall market size of China’s automation in each quarter of 2020-2023Q2

PCIe-6734

From the demand side, OEM market demand continued the weak state of the first quarter, and most industry demand is in a shrinking state; At the project-based market end, the demand for some industries such as power and chemical industry has increased, but the pulling effect on the overall market is limited. From the product side, the product line based on the demand of the OEM industry has declined significantly, such as servo, small PLC, etc.; Product lines with project-based needs performed relatively well, such as large PLCS.
Looking ahead to the second half of 2023, MIR Rui Industrial believes that the automation market is facing downward pressure and the recovery surface is limited. It is mainly manifested in the following aspects:
Three-year cycle decline: Over the past decade or so, the cyclical movement of the automation market has been relatively obvious, and 2023 May be the trough of this cycle, and the market may experience a cyclical decline. That means market demand could weaken and companies could face falling sales and pressure on profits.
Bullwhip effect: Market depression may lead to excessive contraction of agents’ confidence. When the market is sluggish, agents may be worried about the market prospects and reduce the procurement and promotion of automation products, further affecting the growth of the market. This psychological effect may lead to a further decline in market demand.
Weak downstream demand: Some of the more cyclical sectors, such as real estate and manufacturing, may face falling investment and weak demand. Factors such as less than expected investment in the infrastructure industry, the outflow of manufacturing from China, and sluggish internal circulation consumption are likely to have a negative impact on the automation market. In particular, the decline in automotive production and sales and the slowdown in the growth of the lithium battery industry may lead to a reduction in the demand for automation equipment and solutions.
Weak external demand: The slowdown in export growth in 2022 has a greater impact on the automation market. If overseas demand contracts further and China’s export growth slows sharply, this will exacerbate the impact on the automation market. The reduction in the size of overseas markets will lead to a reduction in market demand, especially for enterprises specializing in export business.