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Article12 May 2023

Robots Rise: The Tailwinds of Automation in Three Charts

A recent report from Citi Research’s Andrew Kaplowitz looks at the continuing tailwinds to automation in the US industrial complex.

Is automation spending – often considered discretionary – in something more akin to a resilient upcycle? That and other questions were put to 200 manufacturing decision makers in a recent survey by Citi Research.

The backdrop to this survey is that Citi Research analysts reckon spending on automation has accelerated in the post-COVID era as companies try to better manage supply chain dynamics, and buttress manufacturing efficiency and productivity in a tighter labor market. They also say accelerated investment in domestic manufacturing is a still-emerging trend that could support growth in automation end markets.

The top priorities when adopting automation are productivity, revenue growth, and improvement in quality. The continuation of labor shortage/workforce scarcity and growing competitive dynamics continue to make the case for automation or robotics stronger.

And with the US regulatory backdrop – particularly the IRA and CHIPs Act putting an emphasis on domestic manufacturing – companies could see increased incentives to adopt automation and drive competitiveness.

Here are a few charts that detail some of the survey’s key takeaways:

Robots1.png/

© 2023 Citigroup Inc. No redistribution without Citigroup’s written permission.
Source: Citi Research, Survey of Manufacturers (n=200)

 

Robots2.png/

© 2023 Citigroup Inc. No redistribution without Citigroup’s written permission
Source: Citi Research, Survey of Manufacturers (n=200)

© 2023 Citigroup Inc. No redistribution without Citigroup’s written permission
Source: Citi Research, Survey of Manufacturers (n=200)

There are several more interesting takeaways from the survey in the full Citi Research report, published on 24 April 2023. These include a breakdown of the top priorities behind automation, barriers to greater uptake, and how geopolitics could actually make automation more attractive. Find it here: US Industrial Conglomerates - Automation Survey Points To Ongoing Tailwinds

Citi Global Insights (CGI) is Citi’s premier non-independent thought leadership curation. It is not investment research; however, it may contain thematic content previously expressed in an Independent Research report. For the full CGI disclosure, click here.

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