North America and Europe Industrial Automation Market Forecast to 2028 - COVID-19 Impact and Regional Analysis By Component (Hardware and Software), System (Supervisory Control and Data Acquisition, Distributed Control System, Programmable Logic Control, and Others), and End User (Oil & Gas, Automotive, Food & Beverage, Chemical & Materials, Aerospace & Defense, and Others)

The North America and Europe industrial automation market is expected to grow to US$ 127.11 billion by 2028; it is estimated to grow at a CAGR of 6.9% from 2022 to 2028.

During the forecast period, the industrial automation market players are expected to benefit significantly from the increasing demand for automation in the construction sector. The construction industry is highly reliant on manual labor, and physical work is the primary source of productivity. However, the trend is changing as the adoption of automated solutions such as robots is increasing across various industries, including construction, refurbishment, and deconstruction. While robots are yet to have a substantial role in commercial construction, the rising investment in automation is expected to drive the demand for automated solutions in the construction sector.

The use of various types of robots, such as those for 3D printing, demolition, and remote-controlled or autonomous vehicles, is increasing in the construction industry. Despite the fact that the adoption of automation in construction is still in its early stages, it is expected to accelerate in the future, driving growth in the industrial automation market.

In 2020, ABB commissioned a global survey of 1,900 small and large construction businesses in Europe, the US, and China. The survey found that 81% of respondents planned to increase the use of robotics and automation within the next decade. The increasing adoption of robots in the construction industry is expected to drive the growth of the industrial automation market.

The growth of the industrial automation market is hindered by the high initial investment required for implementing automated machinery and solutions. The cost of material and labor involved in installing such technologies is significantly higher than that of traditional solutions in various industries. In addition, the adoption of industrial automation requires skilled labor to operate, which is a challenge in developing and underdeveloped countries. Moreover, the installation of these technologies increases the cost of training and support, leading to higher operational costs. These factors are limiting the uptake of industrial automation in such countries and thus, restraining the growth of the industrial automation market.

The implementation of automated processes in the automotive industry involves optimizing repetitive tasks, such as welding, material handling, and assembling car components. The integration of vision, robotics, and software can improve quality, repeatability, and reduce labor costs and rework. In Europe, many well-known car manufacturers, such as Volkswagen, BMW, Peugeot, and Renault, have established over 200 production and assembly plants, which produced more than 15 million cars in 2019. Therefore, the strong presence of the automotive industry in Europe is expected to drive the adoption of automated solutions across the industrial automation market in the region.

The adoption of robotics systems in manufacturing facilities has been a trend in Europe for some time now, and the ongoing advancements in IoT-based technologies are further driving its adoption. The European Commission has allocated a budget of US$780 million for R&D in robotics, AI, and Cobots between 2018 and 2020, with countries such as Germany, the UK, and France being at the forefront of the European industrial automation market. The European Commission is primarily focused on R&D funding to enhance the competitiveness of its manufacturing sector and maintain its global technological leadership. Among the key players in the Europe industrial automation market are ABB Ltd, Hitachi Ltd, OMRON Corporation, Siemens, and Emerson Electric Co.

Industrial automation in Germany is boosted by the country's strong focus on digitalization across the manufacturing sector, with a robot density of over 300 per 10,000 workers making it one of the major adopters of industrial robots. Germany's robust infrastructure, presence of original equipment manufacturers (OEMs), R&D capabilities, and political and industrial stability position it as Europe's hub for robotics. The food & beverage industry is one of the largest industries in Germany, with R&D and innovation expenditure reaching EUR 3 billion in 2019, creating a significant scope for industrial automation. The German airport authorities have also invested heavily in advanced technologies for airport renovation. For example, Munich Airport and Lufthansa tested a humanoid robot for passenger guidance in Terminal 2 in February 2018, while Frankfurt Airport deployed FRAnny, an AI-powered robotics head to assist passengers with information in April 2019.

The industrial automation market in North America and Europe is classified into three segments: component, system, and end-user. The component segment is further divided into hardware and software. The system segment is categorized into supervisory control and data acquisition, distributed control system, programmable logic control, and others. The end-user segment includes oil & gas, automotive, food & beverage, chemical & materials, aerospace & defense, and others.

Impact of COVID-19 Pandemic on North America and Europe Industrial Automation Market

North America is known for its high acceptance and development rate of emerging technologies, aided by favorable government policies to boost innovation and infrastructure capabilities. Unfortunately, the outbreak of COVID-19 had a negative impact on the region's automotive industry, particularly in Mexico, which saw a 90% decline in auto shipments. Despite this setback, other industries in the region saw a significant increase in robot procurement in Q1 of 2021. According to the Association for Advancing Automation, metal manufacturers saw an 86% increase, life sciences, pharmaceuticals, and biomed manufacturers saw a 72% increase, food and consumer goods manufacturers saw a 32% increase, and other non-automotive manufacturers saw a 12% increase in robot adoption compared to Q1 of 2020. This rise in robot adoption has helped to revive the sales volume of industrial automation solutions in North America in 2021.