North American companies boost spending on industrial robots: study

(Reuters) - North American companies increased spending on industrial robots in the second quarter, even as many businesses remained tight-fisted about other types of investments amid a prolonged trade war with China.

FILE PHOTO: A large robot nicknamed ÒKongÓ lifts the body of a Ford Expedition SUV at Ford's Kentucky Truck Plant as the No. 2 U.S. automaker ramps up production of two large SUV models in Louisville, Kentucky, U.S., February 9, 2018. REUTERS/Nick Carey - RC1DE3D4A5D0

Firms ordered 8,572 robots in the second quarter, a more than 19% increase over a year ago, according to the Association for Advancing Automation, an industry group based in Ann Arbor, Michigan.

Robot sales have grown through much of the economic expansion as the unemployment rate has fallen to its lowest level in decades and factories continue adding workers —suggesting companies are using robots to augment hard-to-find labor.

When combined with the first quarter, orders for industrial robots this year are up 7.2% to 16,448 units. The value of those robots, however, declined 1.3% to $869 million from a year ago.

The average price of robots continues to decline as businesses shift toward buying a new generation of smaller, more flexible machines now coming on the market. The declining cost is one reason more businesses are adopting the technology.

Vickers Engineering Inc, in New Troy, Michigan, is one company that has poured money into the machines. The company, which mostly makes auto parts, bought its first robot in 2006, but now has 37.

“Our headcount has ticked up over the last 10 years” from 160 to 190 employees, said Matt Tyler, the company’s CEO and owner.

But the mix of workers today is different, with far more of them doing technical jobs like machine programming and design and fewer workers tasked with simple manual tasks, like loading and unloading machines.

“Our research shows that across the past 22 years, in every period that robot sales went up, unemployment in the U.S. went down. And conversely, when robot sales went down, unemployment went up,” wrote Jeff Burnstein in a study for the Association for Advancing Automation.

The investments are notable at a time when many economists say businesses have become stingier on other spending. Last year’s tax cut was supposed to release a boom of business spending. But after an initial surge, spending has slumped.

(GRAPHIC: industrial Robot Orders link: ).

Reporting by Timothy Aeppel, Editing by Joe White