In view of the continuously fluctuating global economic and market conditions, Interact Analysis adjusted its medium-term forecast for the global warehouse building construction, warehouse automation, and mobile robot markets: lowered the growth forecast for the warehouse building construction and related fixed automation markets, and raised the global market demand for mobile robots.

Taking into account the excess capacity of new warehouses built during the pandemic, the slowdown of e-commerce growth in the post-pandemic era, and the general global recession, the number of new warehouses built globally in the future is projected to be lower than predicted in the previous version of the Interact Analysis.

In addition, market expectations for fixed automation equipment related to warehouse construction were also lowered accordingly. This is because there is less demand for end-to-end automation solutions as companies begin to reevaluate investment plans and prioritize cost-effectiveness. However, this downward trend is temporary and as the global economy gradually recovers and market demand grows, warehouse construction and related automation technologies will come back into focus.

Against this backdrop, though, we find that the mobile robot industry is showing good resilience and expect demand to continue to grow. The increase in mobile robot deployment rates is mainly due to falling prices and evolving industry needs. In particular, the demand for automatic forklifts has shown an unexpected increase. Gentle price declines and rising labor costs make mobile robots a more attractive investment option for companies.

The number of new warehouses is expected to decrease

According to the latest forecast from Interact Analysis, fewer warehouses will be built worldwide. We expect 6,700 fewer new warehouses to be built globally by 2027, equivalent to about 1.4 billion square feet of storage space, compared to our 3Q2022 forecast. This is mainly due to a decrease in the number of new fulfillment centers worldwide.

The number of warehouse automation orders is expected to decrease in 2030

In 2023, the number of new warehouses built in North America and major European countries has begun to decrease significantly, and is expected to decrease by about 35% compared to 2022. This has also led to a decline in orders for end-to-end automation solutions typically associated with greenfields (new facilities). But again, this slowdown is temporary, and the warehouse construction industry is expected to perk up again by 2025 as the economy recovers.

A slowdown in downstream verticals

In 2022, as the impact of the pandemic wears off, consumers begin to reduce their reliance on e-commerce and return to offline brick-and-mortar shopping, leading to a slowdown in the growth of warehouse automation orders in consumer-oriented verticals such as groceries, apparel and daily necessities, which had previously been among the highest growth areas.

A rebound in upstream verticals

Conversely, upstream verticals, such as food and beverage, as well as manufacturing, are expected to see increased demand for warehouse automation. Manufacturers are investing more in automation, driven by nearshore production trends and local government incentives in the Americas, Europe and elsewhere. In 2022, the growth rate of automation in the food and beverage industry increased thanks to aggressive investments in automation by many consumer goods (CPG) companies, and this upward trend is expected to continue in the near term.

The resilience of the Asia-Pacific region

Despite the slowdown in automation demand in North America and Europe, the Asia-Pacific region still appears to be less affected by global macroeconomic fluctuations, maintaining growth momentum similar to previous years.

The popularity of single point solutions has increased

As the decline in greenfield facilities (i.e., new facilities) leads to a decline in the need for end-to-end solutions, warehouse operators are turning their attention to existing facilities. As a result, there is an increased need to deploy single point solutions on brownfields (established facilities).