Factory automation refers to the integration of machinery, software and advanced control systems to enhance productivity, efficiency and precision in industrial operations. It involves the use of automated equipment and technology to manage manufacturing processes with minimal human intervention.
The factory automation market consists of sales, by entities (organizations, sole traders or partnerships), of technologies and systems designed to automate manufacturing processes, ultimately aiming to enhance productivity and reduce operational costs. This automation can range from simple tasks performed by single machines to comprehensive systems that operate entire production lines with minimal human intervention.
The global factory automation market was valued at $215,021.43 million in 2019 which grew till 2024 at a compound annual growth rate (CAGR) of more than 6.00%.
Rising Labor Costs
Rising labor costs had fueled the growth of the factory automation market. As industries faced difficulties in hiring skilled workers and dealing with higher labor costs, they increasingly turned to automation solutions to maintain productivity and reduce reliance on human labor. This shift drove significant demand for advanced automation technologies in manufacturing. For example, in 2024, according to the Wage Price Index (WPI), published by the Australian Bureau of Statistics, an Australia-based government agency that collects and analyzes statistics, in the first quarter of 2021, labor costs increased by 1.5%, marking the slowest growth rate since the second quarter of 2020. The private sector experienced a 2.0% increase in labor costs, while the public sector saw a 0.5% rise in 2020. Additionally, labor shortages and high turnover rates had accelerated the growth of the factory automation market. As businesses struggled to maintain a stable workforce, automation technologies were adopted to ensure continuous production and reduce dependency on an unreliable labor pool. This trend led to increased investments in robotic systems and automated solutions to address workforce challenges. Therefore, the rising labor costs supported the growth of the factory automation market.
Integration Of IoT For Enhanced Operational Efficiency And Smart Manufacturing
Companies in the market are focusing on integrating IoT (internet of things) to drive the growth of factory automation by enabling seamless communication between machines, devices and systems. It allows for real-time monitoring and data collection, leading to improved operational efficiency, predictive maintenance and reduced downtime. By integrating IoT sensors and analytics, factories can optimize production processes, reduce waste and enhance overall productivity. This connectivity fosters smarter decision-making, resulting in more agile and cost-effective manufacturing operations. For example, in February 2024, SK Energy, a South Korea-based energy company, signed a strategic business agreement with PTC Korea, a South Korea-based technology company, to build and operate a smart plant. SK Energy decided to commercialize Smart Plant Solutions that combines digital technologies such as Internet of Things (IoT) and Augmented Reality (AR) with previously built smart plants, aiming for not only Korean energy and chemistry industries but also global market.
The global factory automation market is fairly fragmented, with a large number of small players operating in the market. The top ten competitors in the market made up to 13.93% of the total market in 2023.
Factory Automation Global Market Opportunities And Strategies To 2034 from The Business Research Company provides the strategists; marketers and senior management with the critical information they need to assess the global factory automation market as it emerges from the COVID-19 shut down.
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Where is the largest and fastest-growing market for factory automation? How does the market relate to the overall economy; demography and other similar markets? What forces will shape the market going forward? The factory automation market global report from The Business Research Company answers all these questions and many more.
The report covers market characteristics; size and growth; segmentation; regional and country breakdowns; competitive landscape; market shares; trends and strategies for this market. It traces the market's history and forecasts market growth by geography. It places the market within the context of the wider factory automation market; and compares it with other markets.
The report covers the following chapters
- Introduction and Market Characteristics- Brief introduction to the segmentations covered in the market, definitions and explanations about the segment by component, by factory automation technology and by end-user.
- Key Trends- Highlights the major trends shaping the global market. This section also highlights likely future developments in the market.
- Macro-Economic Scenario- The report provides an analysis of the impact of the COVID-19 pandemic, impact of the Russia-Ukraine war and impact of rising inflation on global and regional markets, providing strategic insights for businesses in the factory automation market.
- Global Market Size And Growth- Global historic (2019-2024) and forecast (2024-2029, 2034F) market values and drivers and restraints that support and control the growth of the market in the historic and forecast periods.
- Regional And Country Analysis- Historic (2019-2024) and forecast (2024-2029, 2034F) market values and growth and market share comparison by region and country.
- Market Segmentation- Contains the market values (2019-2024) (2024-2029, 2034F) and analysis for each segment by component, by factory automation technology and by end-user in the market. Historic (2019-2024) and forecast (2024-2029) and (2029-2034) market values and growth and market share comparison by region market.
- Regional Market Size and Growth- Regional market size (2024), historic (2019-2024) and forecast (2024-2029, 2034F) market values and growth and market share comparison of countries within the region. This report includes information on all the regions Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa and major countries within each region.
- Competitive Landscape- Details on the competitive landscape of the market, estimated market shares and company profiles of the leading players.
- Other Major And Innovative Companies Details on the company profiles of other major and innovative companies in the market.
- Competitive Benchmarking- Briefs on the financials comparison between major players in the market.
- Competitive Dashboard- Briefs on competitive dashboard of major players.
- Key Mergers and Acquisitions- Information on recent mergers and acquisitions in the market is covered in the report. This section gives key financial details of mergers and acquisitions which have shaped the market in recent years.
- Market Opportunities And Strategies- Describes market opportunities and strategies based on findings of the research, with information on growth opportunities across countries, segments and strategies to be followed in those markets.
- Conclusions And Recommendations- This section includes recommendations for factory automation providers in terms of product/service offerings geographic expansion, marketing strategies and target groups.
- Appendix- This section includes details on the NAICS codes covered, abbreviations and currencies codes used in this report.
Markets Covered:
- 1) By Component: Sensors; Controllers; Switches And Relays; Industrial Robots; Drives; Other Components
- 2) By Factory Automation Technology: Distributed Control System (DCS); Supervisory Control And Data Acquisition System (SCADA); Manufacturing Execution System (MES); Systems Instrumented System (SIS); Programmable Logic Controller (PLC); Human Machine Interface (HMI); Other Technologies
- 3) By End-User: Manufacturing; Automotive; Packaging And Processing; Energy And Power; Semiconductor And Electronics; Printing And Converting; Other End-Users
- Companies Mentioned: Keyence Corporation; Mitsubishi Electric Corporation; Fanuc Corporation; Schneider Electric SE; Bosch Rexroth AG (Robert Bosch GmbH)
- Countries: China; Australia; India; Indonesia; Japan; South Korea; Thailand; Vietnam, Malaysia; Singapore; Taiwan; USA; Canada; Brazil; Mexico; France; Germany; UK; Italy; Spain; Russia
- Regions: Asia-Pacific; Western Europe; Eastern Europe; North America; South America; Middle East; Africa
- Time-series: Five years historic and ten years forecast.
- Data: Ratios of market size and growth to related markets; GDP proportions; expenditure per capita; factory automation indicators comparison.
- Data segmentations: country and regional historic and forecast data; market share of competitors; market segments.
- Sourcing and Referencing: Data and analysis throughout the report is sourced using end notes.