A recent slowdown in warehousing construction and related demand for automation projects is expected to hit bottom this year, with both markets expected to return to growth in 2024, according to a report from market research firm Interact Analysis, released this month.
The post-Covid construction boom—which was driven by unprecedented demand for e-commerce—slowed over the past 12 months thanks to declining e-commerce activity and rising interest rates. As a result, warehouse construction is expected to decline 25% year-over-year in 2023, according to Interact Analysis’ Warehouse Automation Report mid-year update. But the report’s author, Reuben Scriven, says the “green shoots of recovery” are starting to come through, as e-commerce activity has begun to stabilize and companies look to boost inventory levels to deal with supply chain uncertainties.
“With e-commerce at the tail end of the post-Covid correction, coupled with the trend away from just-in-time inventory management toward just-in-case supply chains, warehouse construction is forecast to return to growth from the end of this year, fueling demand for automation solutions during 2024 and into 2025, particularly in the U.S.,” Scriven wrote in the July update.
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