Supply Chain Research

The Boston Consulting Group last year estimated that industrial automation will reach 25% of manufacturing tasks globally by 2025 from 10% currently. The process of automation may work against attempts by the incoming U.S. presidential administration to boost U.S. employment by increasing trade tariffs. U.S. manufacturers may well ‘onshore’ work, but use an increased proportion of industrial robots vs. their existing ‘offshore’ facilities.

Panjiva data shows U.S. imports of industrial robots and parts increased to $1.47 billion in the 12 months to September 30, a 220% increase vs. the same period in 2010. Japanese exporters accounted for 42% of shipments in the past 12 months, though imports from Canada have increased rapidly, jumping 53% in September while Japan’s fell 3%. Shipment from all exporters for October suggests a third straight month growth in imports of 12.4% is possible.

Lower panel shows change on year earlier in dollar value except October 2016 in TEUs Source: Panjiva

Among the Japanese manufacturers, Fanuc is the largest exporter to the U.S., accounting for 60% of all U.S. imports of industrial robots in the 12 months to October 31. It may have hit saturation, however, with imports in the last three months falling 1.8% vs. the same period a year earlier despite a 1.3% increase in October. Other Japanese manufacturers are growing more quickly, but from a small base. Kawasaki Heavy’s exports to the U.S. climbed 136% in the quarter to October 31, while Yaskawa Electric’s increased 14.6%.

Data for industrial robot imports to the U.S. segmented by company name Source: Panjiva

The U.S. runs an “industrial robot deficit” from a trade perspective, but it nonetheless had $790m of exports in the 12 months to September 30. These are declining though – exports in September fell 20.3% on a year earlier, the fourth straight month of decline. This is partly due to a stronger dollar making U.S. products less attractive.

Importantly, 53.4% of U.S. industrial robot exports go to Mexico, Canada and China, and it has a net export surplus in the products with those three countries. Aggressive trade policies with regards to NAFTA or duties against China may therefore prove counterproductive, at least for the industrial robotics industry.

Upper panel shows balance of exports and imports, lower panel the change in exports Source: Panjiva