There has never been a shortage of ‘takeover of the machines’-themed stories in pop culture, but it’s never been followed by a tangible surge in installed intelligent technology. In a recent report, BMO senior economist Sal Guatieri argued that this time might be different.
Mr. Guatieri noted that industrial robot sales increased at a 13 per cent annual pace between 2015 and 2020 to total 3 million. Last year saw a record increase of over 500,000 robots and the first quarter of 2022 saw 28 per cent year over year sales growth in North America, another record.
Robotic sales are benefiting from a number of trends. They help address labour shortages and rising wage costs, they are now cheaper and more easily maintained than ever before, and the technology has progressed to the point where it can be used in service industries for tasks like cleaning floors, package order fulfillment and unloading trucks. BMO reports that demand for robots in services sectors now outpaces industrial demand.
The presence of robotics in the economy is expected to accelerate in the coming years. Mr. Guatieri cites Fortune Business estimates that global industrial robot sales will climb from US$16.8-billion in 2022 to US$35.7-billion by 2029. Boston Consulting Group predicts that sales of all forms of robots will jump from US$25-billion in 2022 to between US$160-billion and US$260-billion annually by 2030.
For investors looking to benefit from the trend toward automation, the pure plays are unfortunately few and far between. Japan’s Fanuc Corp. might be closest and there are companies like Intuitive Surgical Inc. (ISRG-Q) that specialize in individual sectors.
The selection of robotics ETFs is not as narrow, ranging from the Global X Robotics and Artificial Intelligence Thematic ETF (BOTZ-Q) to ROBO Global Robotics and Automation Index ETF (ROBO-A) to the domestically traded Horizons Robotics and Automation Index ETF (RBOT-T).
-- Scott Barlow, Globe and Mail market strategist
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Compiled by Globe Investor Staff