Amid a tight labor market and increasing compensation costs, North American companies are turning to robotics and automation as ways to keep up with production, according to the A3 Association for Advancing Automation

Companies ordered a total of 12,305 robotic machines in the second quarter, valued at $585 million. That’s 25% more units than during the same period a year ago. When added to the figures from the first quarter, it amounts to the best first half ever for robotics technology. A tight labor market and rising compensation costs are driving factories to turn toward automation as a way to push products. 

“Companies need to get products out the door – and so they need new automation,” said Jeff Burnstein, President of the Association for Advancing Automation.

A3 found that nearly 60% of the robots ordered in the second quarter went to automotive companies, which are working to guide production toward new technologies, like electric vehicles.

The struggling labor market has contributed to the accelerated interest in robotics. There are nearly two jobs for every unemployed worker, causing employers to get wrapped up in bidding wars for wages. Total US labor costs increased 5.1% in the second quarter.  

The use of robotics to increase the productivity of workers has not been demonstrated yet. However, US productivity fell in the second quarter at the steepest pace on an annualized basis since the inception of reporting in 1948. 

Burnstein said companies implementing new technology need time before they can maximize their full potential. “There’s a learning curve,” he said. The COVID-19 pandemic may also contribute to the slow increase in productivity, as new workers are replacing those who left during the health crises.

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