Developers, suppliers, integrators, and end users of warehouse automation continue to face challenges. Orders for warehouse automation declined by 3% in 2024, according to Interact Analysis.
The market research firm attributed the latest decline was to economic, political, and market-specific challenges. They included persistently high interest rates in many regions and the residual effects of an oversupply of warehouses built during the COVID-19 pandemic.
In addition, Interact Analysis said it expected increasing competition from Chinese vendors to drive down prices and slow revenue growth over the forecast period to 2030. Global macroeconomic factors such as interest rates, political uncertainty around elections, and the Chinese real estate crisis have significantly affected sales cycles, slowing the pace of orders, it said.
Despite the forecasted decline, growth could pick up in 2025, which the firm predicted would be a year of slow recovery for the sector. Interact Analysis said it expects pre-pandemic growth levels to return in 2026 and projected long-term expansion at a compound annual growth rate (CAGR) of 8% between 2024 and 2030.
Food and beverage, durable manufacturing buck the decline
The durable manufacturing and food and beverage industries continued to spend on automation during the downturn, noted Interact Analysis. Warehouse automation revenues in the food and beverage sector were bolstered by cold-chain automation, as well as by large-scale projects from consumer packaged goods (CPG) manufacturers.
Manufacturing spending was driven in part by government subsidies in territories such as the U.S., although these are expected to be stripped back by the Trump administration. The White House is looking to spur domestic investments through tariffs, observed the market intelligence specialist.
These two sectors registered the highest growth in warehouse automation revenues between 2022 and 2024, with increases of 11% for durable manufacturing and 10% for food and beverage.
Meanwhile, Interact Analysis said it expected fulfillment investment to return in the midterm as online retailers fully utilize capacity created during the pandemic and look to expand their networks with greenfield projects. These factors contributed to its projection of a 9% CAGR in the warehouse automation market between 2026 and 2030.
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Macroeconomic challenges constrain market growth
Although high interest rates and geopolitical tensions have deterred large-scale investments in fulfillment center automation, Interact Analysis said it anticipates growth to return as e-commerce demand stabilizes and e-tailers expand their networks. Between 2027 and 2030, a rise in fulfillment projects could contribute to a 28% CAGR in warehouse automation order intake, it said.
Sluggish consumer spending in China caused by the housing crisis continues to dampen warehouse automation investment, and the firm does not expect it to pick up in the short term. Analysts were cautiously optimistic about U.S. and European markets.
“We anticipate that warehouse automation investments in the U.S. will increase in 2026 as end customers settle into the new president’s policies, resulting in an uptick in revenue in 2027,” stated Rowan Stott, a senior research analyst at Interact Analysis.
“Europe is expected to lag behind the U.S. in terms of an economic recovery, particularly Germany and the U.K., which have both experienced sluggish economic growth in recent years,” he added. “However, Eastern Europe is proving to buck the trend, as the region is experiencing an influx of foreign direct investment (FDI) from the likes of Western European companies re-shoring production, as well as Chinese companies looking to enter the European market.”
Interact Analysis, others expect growth to rebound
Interact Analysis’ report came out as other organizations also noted declines. The Association for Advancing Automation (A3) said that North American companies ordered 31,311 industrial robots worth $1.9 billion in 2024, a growth of 0.5% in units and 0.1% in revenue over 2023. The association also noted increasing demand in food and beverage, with a 65% increase in robot orders.
The International Federation of Robotics (IFR) predicted that advances in artificial intelligence will benefit robotics applications across industries in 2025. Other industry observers such as Plus One Robotics CEO Erik Nieves said they expect more market consolidation in warehouse automation.
Wellingborough, U.K.-based Interact Analysis said its research “covers the entire automation value chain – from the technology used to automate factory production, through inventory storage and distribution channels, to the transportation of the finished goods.” The company spent months conducting more than 100 interviews and analyzed more than 120 companies, looking specifically at their past, present, and future investments in warehouse automation.
The premium version of its report contains a midyear update to adjust forecasts made in the standard version. It also contains access to product news and financial databases, as well as a Warehouse Automation Services Excel that breaks out the after-sale services and provides forecasts into the different services.
