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Robotics and Automation in 2022 – Can They be a Hedge to Recession, IDTechEx Asks

Robotics and Automation in 2022 – Can They be a Hedge to Recession, IDTechEx Asks
PR Newswire
BOSTON, Dec. 8, 2022

BOSTON, Dec. 8, 2022 /PRNewswire/ — The market for service, collaborative, and mobile robots is expected to exceed US$ 90 billion by…

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Robotics and Automation in 2022 - Can They be a Hedge to Recession, IDTechEx Asks

PR Newswire

BOSTON, Dec. 8, 2022 /PRNewswire/ -- The market for service, collaborative, and mobile robots is expected to exceed US$ 90 billion by 2032.

Robotics and automation have significantly revolutionized how people work and live across a number of industries. With the increasing likelihood of a global economic recession in 2023, many industries are struggling with increasing manufacturing costs, such as labor and raw material costs, and maintaining their profit margins. The robotics and automation sector provides solutions to mitigate the issue by reducing operational costs and increasing production efficiency. As a result, IDTechEx believes that robots will be increasingly adopted to hedge against the upcoming recession. In this article, IDTechEx highlights the robot's pivotal applications and benefits from its independent perspective on this crucial industry.

Collaborative Robots (Cobots) Will be in Their Prime Time within Ten Years

While industrial robots have been popular for many years, they bring some social-economic problems, such as concerns over manual labor replacement and high upfront costs. Cobots are introduced to solve these problems. So, what exactly is a cobot, and why are they expected to gain popularity? To understand this, IDTechEx summarizes a few key drivers.

Driver One – Low Capital Barrier and Fast Return on Investment (ROI).

Unlike traditional industrial robots that work in a space physically separate from human operators, cobots are designed to work side-by-side with humans in a 'co-working' space. In addition, cobots are typically smaller, slower, and cheaper than industrial robots to ensure a high safety level. Thanks to these features, many small and medium enterprises (SMEs) with a limited budget have started to adopt cobots in recent years. Meanwhile, the low, upfront cost also leads to a short payback time. According to IDTechEx's research, the average payback time for a cobot is less than a year in several applications.

Driver Two – Reshoring and Increasing Demand for Productivity Upgrades for SMEs.

Ever since the occurrence of COVID, global supply chain disruption has been a massive pain point across the globe. This has made many large companies aware of the weaknesses of the current business model where manufacturing is outsourced, and global logistics is heavily needed. As a result, many global companies have started to seek local suppliers to mitigate these issues. However, one issue with this is that many local suppliers are small, and their limited manufacturing capacity does not meet the demand of large companies. Therefore, many local suppliers have started seeking factory automation to boost their productivity.

Driver Three – Calling to Bring Humans Back to Factories and Creating a Human-centric Working Environment.

In 2020, the European Commission proposed its 'Industry 5.0' plan. Compared with the 'Industry 4.0' plan that has been discussed for around a decade, Industry 5.0 focuses more on human-robot collaboration and bringing people back to production lines. In Industry 4.0, human operators are required to adapt to machines, and the interaction between robots and human operators is limited. In Industry 5.0, the situation is reversed. One of the fundamental concepts of Industry 5.0 is the human-centric working environment where machines need to adapt to human operators.

Despite the drivers, cobots are still at their formative stage and the market share of cobots in industrial applications is less than 10% at this stage. Nevertheless, IDTechEx believes that the market will start to take off within two years thanks to the 'smart factory' proposals by leading automotive manufacturers, such as Audi. Industry 5.0 in 2030 is expected to add more momentum to the cobot industry. IDTechEx believes that the market size of cobots will exceed US$ 100 billion by 2042. The increasing market in cobots also presents significant opportunities for safety sensors used in cobots, as cobots need a combination of sensors to enhance their safety. More details about collaborative robots and their impacts on Industry 5.0 can be found in IDTechEx's latest research – 'Collaborative Robots (Cobots) 2023-2043: Technologies, Players & Markets'.

Service Robots will Automate Many Daily Tasks

A service robot is a machine/robot that performs useful tasks, excluding industrial automation applications. As a broad definition, service robots can be utilized to automate a broad spectrum of industries, including logistics and delivery, cleaning and disinfection, socializing, agriculture, underwater exploration, food service, and more.

Driven by increasing labor costs, the trend for deglobalization, border closure, and the increasing value for money of robots, service robots have become more popular over the past decade. Compared with traditional industries where thousands of laborers are needed for repetitive tasks, service robots offer solutions to automate a significant number of dull tasks with higher efficiencies.

Although service robots can automate many industries, each type of robot presents a different technology readiness level (TRL) and addressable market. Among all the applications, delivery and logistics robots, along with cleaning and disinfection robots, are expected to lead the market in the foreseeable future thanks to their high TRL and large addressable markets.

By contrast, social robots, kitchen & restaurant robots, agricultural robots, and underwater robots are still in their early commercialization stage because of regulations and high technical barriers. However, IDTechEx sees enormous potential and a surge in the market size of these emerging applications with the easing of regulations and increasing technical robustness. For example, IDTechEx predicts an 8.8-fold increase in demand for logistics and delivery robots and a 6.8-fold increase for social robots by 2032 compared with 2021. More details about the forecast and why the market will grow like this have been explained in detail in IDTechEx's latest research – 'Service Robots 2022-2032: Technologies, Players & Markets'.

Drivers:

Many industries have used service robots, and it is worth noting that the stages of development commercialization are susceptible to several factors. These include technology readiness levels (TRLs) and addressable markets. For example, delivery and logistics robots, along with cleaning robots, have the highest TRL as they typically work in a well-controlled indoor environment. In contrast, underwater robots present low TRL because they work in harsh environments with low temperatures, low visibility, and limited GPS signal, among other challenges. Similarly, agricultural robots have low TRL as they need to tackle difficult terrain and unpredictable weather, which adds significant complexity to their sensory systems, design, and control. During the past several years, COVID-19 has driven the demand for cleaning and disinfection robots and robotic waiters. As an example, there have been at least 50 more cleaning & disinfection robot manufacturers founded in 2021 compared with 2020. With the lingering impacts of COVID, IDTechEx believes that the unit sales of cleaning and disinfection robots will continue to grow at double-digit rates on average each year from 2022 to 2027.

Barriers:

Regulations are a significant barrier slowing down the market uptake of social robots. The global pandemic has boosted the demand for social robots that enable people with conditions like autism to stay connected with their families or medical practitioners in times of social distancing. However, there are debates about how to treat social robots that are designed to interact with humans. Robots, by definition, are machines that should not have emotions. However, social robots are designed to mimic the emotions of their users. Therefore, there has been a debate about whether they are fundamentally designed to deceive people. Therefore, IDTechEx believes that a more considerable uptake in social robots will require further regulations around their deployment.

Autonomous Mobile Robots Will Experience 86-fold Growth in 20 Years.

The warehousing mobile robotics industry has grown quickly in recent years, spurred by advances in robotics technology, autonomous navigation, and AI. It may efficiently and cost-effectively alleviate the labor shortage issues currently threatening the global logistics industry.

The most widely seen mobile robots in warehouses and manufacturing facilities include Automated Guided Vehicles (AGVs), Autonomous Mobile Robots (AMRs), grid-based Automated Guided Carts, and mobile case-picking robots. Between 2019 and 2021, the market size of AGVs, AMRs, and grid-based AGCs increased by 21%, 42%, and 70%, respectively. The transition to a post-pandemic world means many companies have started to adopt mobile robots in their warehouses. This is driven by the flexibility and scalability that mobile robots provide and the shortage of labor resources.

Independent autonomy will be a crucial factor impacting the market trends as it determines the overall level of flexibility and scalability of mobile robots. According to IDTechEx Research, AMRs, without the need for navigation-supporting infrastructure, will reach the largest market size in 20 years, 86 times larger than its size in 2021. While the infrastructure-dependent AGVs and grid-based AGVs will have smaller increases in the market size over the same period. The decrease in the market value of AGVs in the next decade is attributed to the competition with AMRs, as AMRs will gradually replace AGVs in many logistic operations and thus reduce the AGV market share with a shorter system installation time and quicker return on investment (ROI). However, since using navigation infrastructure enables more reliable and safer material transportation with the current technologies, AGVs and grid-based AGCs will still have larger market shares than AMRs in the short term.

Last-mile Delivery Robots

Outside of mobile robots in warehouses, on-demand last-mile delivery robot companies have also received tremendous investment in recent years. For example, Nuro, a market leader in developing autonomous delivery vans, has raised over US$2.1 billion to date. The products in the autonomous last-mile delivery market can be categorized into three types - autonomous delivery vans, sidewalk delivery robots, and autonomous delivery drones. Autonomous last-mile delivery is an attractive but emerging market now – most companies are small start-ups, and their products have not been commercialized yet.

The biggest challenge for market growth in the following years will be regulatory restrictions. In 2021, only a few market leaders were legally approved to run their services and products in restricted areas. Though perhaps with capable technology and products, most last-mile delivery companies cannot validate their business models because of regulatory barriers. However, some countries have seen deregulations and trial commercialization led by governments or authorities over the past five years. IDTechEx estimates that large-scale deregulations will happen in three to four years, starting in high-income regions such as Europe and the USA, resulting in market take-off for autonomous last-mile delivery.

The rapid growth indicates that autonomous last-mile delivery is an emerging but up-and-coming, market. The sidewalk delivery robot market is forecast to have the quickest growth, with a CAGR of 36% between now and 2042. On the other hand, autonomous delivery vans are expected to have the largest market share, occupying 71% of the autonomous last-mile delivery market. In contrast, the market growth of autonomous delivery drones will be slow, primarily because of more regulatory and technological challenges than in the ground-based vehicle delivery market. IDTechEx's latest research, "Mobile Robotics in Logistics, Warehousing and Delivery 2022-2042", provides more details on the development of this market.

Key Summary of Robotics in 2022 – Takeaways:

The increasing likelihood of a recession and increasing costs (e.g. labor, raw materials, and logistics) have driven many companies, from global corporates to SMEs, to adopt collaborative robots to increase productivity. The short payback time (on average less than a year for many applications) and low capital cost (usually <US$ 40,000 per cobot) make them more economical for many companies with low budgets.

Government and large companies' proposals are driving the increase of cobots. Proposals like 'Smart Factory 2025' by Audi and 'Industry 5.0 in 2030' by the European Commission are driving the market increase in cobots, especially within the next five to ten years. The increasing adoption of cobots also requires a higher level of safety, such as force and torque sensors, cameras, and many others.

Service robots have experienced substantial growth over the past two years because of COVID-19, and the economic benefits of many service robots have proven significant. IDTechEx believes that the service robots market will continue to grow.

AGVs and AMRs have rapidly increased over the past two years. With the easing of regulations and improvements in technologies, AMRs are expected to take over AGVs in the long future, although AGVs will remain dominant in the short term.

To see the full IDTechEx robotics and automation research portfolio, including downloadable sample pages for all reports, please visit www.IDTechEx.com/Research/robotics.

About IDTechEx

IDTechEx guides your strategic business decisions through its Research, Subscription and Consultancy products, helping you profit from emerging technologies. For more information, contact research@IDTechEx.com or visit www.IDTechEx.com.

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Schedule for Week of January 29, 2023

The key reports scheduled for this week are the January employment report and November Case-Shiller house prices.Other key indicators include January ISM manufacturing and services surveys, and January vehicle sales.The FOMC meets this week, and the FO…

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The key reports scheduled for this week are the January employment report and November Case-Shiller house prices.

Other key indicators include January ISM manufacturing and services surveys, and January vehicle sales.

The FOMC meets this week, and the FOMC is expected to announce a 25 bp hike in the Fed Funds rate.

----- Monday, January 30th -----

10:30 AM: Dallas Fed Survey of Manufacturing Activity for January. This is the last of the regional Fed manufacturing surveys for January.

----- Tuesday, January 31st -----

9:00 AM: FHFA House Price Index for November. This was originally a GSE only repeat sales, however there is also an expanded index.

9:00 AM ET: S&P/Case-Shiller House Price Index for November.

This graph shows the Year over year change in the nominal seasonally adjusted National Index, Composite 10 and Composite 20 indexes through the most recent report (the Composite 20 was started in January 2000).

The consensus is for a 6.9% year-over-year increase in the Comp 20 index.

9:45 AM: Chicago Purchasing Managers Index for January. The consensus is for a reading of 44.9, down from 45.1 in December.

10:00 AM: The Q4 Housing Vacancies and Homeownership report from the Census Bureau.

----- Wednesday, February 1st -----

7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:15 AM: The ADP Employment Report for January. This report is for private payrolls only (no government). The consensus is for 170,000 payroll jobs added in January, down from 235,000 added in December.

10:00 AM: Construction Spending for December. The consensus is for a 0.1% decrease in construction spending.

Job Openings and Labor Turnover Survey10:00 AM ET: Job Openings and Labor Turnover Survey for December from the BLS.

This graph shows job openings (black line), hires (purple), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

Job openings decreased in November to 10.458 million from 10.512 million in October

10:00 AM: ISM Manufacturing Index for January. The consensus is for the ISM to be at 48.0, down from 48.4 in December.

2:00 PM: FOMC Meeting Announcement. The FOMC is expected to announce a 25 bp hike in the Fed Funds rate.

2:30 PM: Fed Chair Jerome Powell holds a press briefing following the FOMC announcement.

Vehicle SalesAll day: Light vehicle sales for January. The consensus is for light vehicle sales to be 14.3 million SAAR in January, up from 13.3 million in December (Seasonally Adjusted Annual Rate).

This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the December sales rate.

----- Thursday, February 2nd -----

8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 200 thousand initial claims, up from 186 thousand last week.
----- Friday, February 3rd -----

Employment Recessions, Scariest Job Chart8:30 AM: Employment Report for December.   The consensus is for 185,000 jobs added, and for the unemployment rate to increase to 3.6%.

There were 223,000 jobs added in December, and the unemployment rate was at 3.5%.

This graph shows the job losses from the start of the employment recession, in percentage terms.

The pandemic employment recession was by far the worst recession since WWII in percentage terms. However, as of August 2022, the total number of jobs had returned and are now 1.24 million above pre-pandemic levels.

10:00 AM: ISM Manufacturing Index for January. The consensus is for the ISM to be at 50.3, up from 49.6 in December.

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US gov’t $1.5T debt interest will be equal 3X Bitcoin market cap in 2023

The U.S. will pay over $1 trillion in debt interest next year, the equivalent of three or more Bitcoin market caps at current prices.

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The U.S. will pay over $1 trillion in debt interest next year, the equivalent of three or more Bitcoin market caps at current prices.

Commentators believe that Bitcoin (BTC) bulls do not need to wait long for the United States to start printing money again.

The latest analysis of U.S. macroeconomic data has led one market strategist to predict quantitative tightening (QT) ending to avoid a “catastrophic debt crisis.”

Analyst: Fed will have “no choice” with rate cuts

The U.S. Federal Reserve continues to remove liquidity from the financial system to fight inflation, reversing years of COVID-19-era money printing.

While interest rate hikes look set to continue declining in scope, some now believe that the Fed will soon have only one option — to halt the process altogether.

“Why the Fed will have no choice but to cut or risk a catastrophic debt crisis,” Sven Henrich, founder of NorthmanTrader, summarized on Jan. 27.

“Higher for longer is a fantasy not rooted in math reality.”

Henrich uploaded a chart showing interest payments on current U.S. government expenditure, now hurtling toward $1 trillion a year.

A dizzying number, the interest comes from U.S. government debt being over $31 trillion, with the Fed printing trillions of dollars since March 2020. Since then, interest payments have increased by 42%, Henrich noted.

The phenomenon has not gone unnoticed elsewhere in crypto circles. Popular Twitter account Wall Street Silver compared the interest payments as a portion of U.S. tax revenue.

“US paid $853 Billion in Interest for $31 Trillion Debt in 2022; More than Defense Budget in 2023. If the Fed keeps rates at these levels (or higher) we will be at $1.2 trillion to $1.5 trillion in interest paid on the debt,” it wrote.

“The US govt collects about $4.9 trillion in taxes.”
Interest rates on U.S. government debt chart (screenshot). Source: Wall Street Silver/ Twitter

Such a scenario might be music to the ears of those with significant Bitcoin exposure. Periods of “easy” liquidity have corresponded with increased appetite for risk assets across the mainstream investment world.

The Fed’s unwinding of that policy accompanied Bitcoin’s 2022 bear market, and a “pivot” in interest rate hikes is thus seen by many as the first sign of the “good” times returning.

Crypto pain before pleasure?

Not everyone, however, agrees that the impact on risk assets, including crypto, will be all-out positive prior to that.

Related: Bitcoin ‘so bullish’ at $23K as analyst reveals new BTC price metrics

As Cointelegraph reported, ex-BitMEX CEO Arthur Hayes believes that chaos will come first, tanking Bitcoin and altcoins to new lows before any sort of long-term renaissance kicks in.

If the Fed faces a complete lack of options to avoid a meltdown, Hayes believes that the damage will have already been done before QT gives way to quantitative easing.

“This scenario is less ideal because it would mean that everyone who is buying risky assets now would be in store for massive drawdowns in performance. 2023 could be just as bad as 2022 until the Fed pivots,” he wrote in a blog post this month.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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Stay Ahead of GDP: 3 Charts to Become a Smarter Trader

When concerns of a recession are front and center, investors tend to pay more attention to the Gross Domestic Product (GDP) report. The Q4 2022 GDP report…

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When concerns of a recession are front and center, investors tend to pay more attention to the Gross Domestic Product (GDP) report. The Q4 2022 GDP report showed the U.S. economy grew by 2.9% in the quarter, and Wall Street wasn't disappointed. The day the report was released, the market closed higher, with the Dow Jones Industrial Average ($DJIA) up 0.61%, the S&P 500 index ($SPX) up 1.1%, and the Nasdaq Composite ($COMPQ) up 1.76%. Consumer Discretionary, Technology, and Energy were the top-performing S&P sectors.

Add to the GDP report strong earnings from Tesla, Inc. (TSLA) and a mega announcement from Chevron Corp. (CVX)—raising dividends and a $75 billion buyback round—and you get a strong day in the stock markets.

Why is the GDP Report Important?

If a country's GDP is growing faster than expected, it could be a positive indication of economic strength. It means that consumer spending, business investment, and exports, among other factors, are going strong. But the GDP is just one indicator, and one indicator doesn't necessarily tell the whole story. It's a good idea to look at other indicators, such as the unemployment rate, inflation, and consumer sentiment, before making a conclusion.

Inflation appears to be cooling, but the labor market continues to be strong. The Fed has stated in many of its previous meetings that it'll be closely watching the labor market. So that'll be a sticky point as we get close to the next Fed meeting. Consumer spending is also strong, according to the GDP report. But that could have been because of increased auto sales and spending on services such as health care, personal care, and utilities. Retail sales released earlier in January indicated that holiday sales were lower.

There's a chance we could see retail sales slowing in Q1 2023 as some households run out of savings that were accumulated during the pandemic. This is something to keep an eye on going forward, as a slowdown in retail sales could mean increases in inventories. And this is something that could decrease economic activity.

Overall, the recent GDP report indicates the U.S. economy is strong, although some economists feel we'll probably see some downside in 2023, though not a recession. But the one drawback of the GDP report is that it's lagging. It comes out after the fact. Wouldn't it be great if you had known this ahead of time so you could position your trades to take advantage of the rally? While there's no way to know with 100% accuracy, there are ways to identify probable events.

3 Ways To Stay Ahead of the Curve

Instead of waiting for three months to get next quarter's GDP report, you can gauge the potential strength or weakness of the overall U.S. economy. Steven Sears, in his book The Indomitable Investor, suggested looking at these charts:

  • Copper prices
  • High-yield corporate bonds
  • Small-cap stocks

Copper: An Economic Indicator

You may not hear much about copper, but it's used in the manufacture of several goods and in construction. Given that manufacturing and construction make up a big chunk of economic activity, the red metal is more important than you may have thought. If you look at the chart of copper futures ($COPPER) you'll see that, in October 2022, the price of copper was trading sideways, but, in November, its price rose and trended quite a bit higher. This would have been an indication of a strengthening economy.

CHART 1: COPPER CONTINUOUS FUTURES CONTRACTS. Copper prices have been rising since November 2022. Chart source: StockCharts.com. For illustrative purposes only.

High-Yield Bonds: Risk On Indicator

The higher the risk, the higher the yield. That's the premise behind high-yield bonds. In short, companies that are leveraged, smaller, or just starting to grow may not have the solid balance sheets that more established companies are likely to have. If the economy slows down, investors are likely to sell the high-yield bonds and pick up the safer U.S. Treasury bonds.

Why the flight to safety? It's because when the economy is sluggish, the companies that issue the high-yield bonds tend to find it difficult to service their debts. When the economy is expanding, the opposite happens—they tend to perform better.

The chart below of the Dow Jones Corporate Bond Index ($DJCB) shows that, since the end of October 2022, the index trended higher. Similar to copper prices, high-yield corporate bond activity was also indicating economic expansion. You'll see similar action in charts of high-yield bond exchange-traded funds (ETFs) such as iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and SPDR Barclays High Yield Bond ETF (JNK).

CHART 2: HIGH-YIELD BONDS TRENDING HIGHER. The Dow Jones Corporate Bond Index ($DJCB) has been trending higher since end of October 2022.Chart source: StockCharts.com. For illustrative purposes only.

Small-Cap Stocks: They're Sensitive

Pull up a chart of the iShares Russell 2000 ETF (IWM) and you'll see similar price action (see chart 3). Since mid-October, small-cap stocks (the Russell 2000 index is made up of 2000 small companies) have been moving higher.

CHART 3: SMALL-CAP STOCKS TRENDING HIGHER. When the economy is expanding, small-cap stocks trend higher.Chart source: StockCharts.com. For illustrative purposes only.

Three's Company

If all three of these indicators are showing strength, you can expect the GDP number to be strong. There are times when the GDP number may not impact the markets, but, when inflation is a problem and the Fed is trying to curb it by raising interest rates, the GDP number tends to impact the markets.

This scenario is likely to play out in 2023, so it would be worth your while to set up a GDP Tracker ChartList. Want a live link to the charts used in this article? They're all right here.


Jayanthi Gopalakrishnan

Director, Site Content

StockCharts.com

 

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

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