The global market for
warehouse automation is set to continue growing at double-digit rates
, with a slight dip between 2020 and 2021. During those two ‘lean
years’, service, maintenance and the aftermarket will form a key business segment
for system integrators.
In a recently published report, Interact Analysis predicts that the automation market
will grow by 12.6 per cent over the next five years. Between 2020 and (particularly in) 2021,
the market researcher expects this growth to slow temporarily. Trade tensions between
the US and China and a decline in demand in Europe are the main causes of this.
Slowing growth
That slowdown appears to have already begun in the second quarter of 2019, according to the results from the forty largest system integrators. Whilst supplier Dematic saw its order intake rise by
a staggering 52 per cent
compared with Q1 2018, second-quarter results
were significantly lower. Honeywell also reported revenue growth of
just 6.8 per cent, a significant decline compared with previous
quarters. The Kardex Group experienced a split. The
Remstar division, a supplier of smaller solutions, recorded an increase
of 7.5 per cent, whilst the Mlog division saw its order intake fall by 43 per cent
. The latter focuses on integrated solutions of a certain
scale. The Kardex Group attributes this discrepancy partly to
a reluctance in the market to make major investments.
Service, maintenance and aftermarket
Slowing growth in 2020 and 2021 makes service, maintenance and aftermarket an increasingly important business area for system integrators. Service and maintenance contracts assure suppliers of a steady revenue stream. As the number of systems delivered increases, service and maintenance contract revenues also increase. This will offset some of the negative effects of the dip.
Double-digit growth rates from 2022 onwards
Interact Analysis predicts the market will return to double-digit growth by 2022. The logistical pressure e-commerce is putting on distribution networks and growing consumer demand for faster delivery options will lead to long-term and sustainable growth in the automation market, according to the market researcher.
