North American cos send in robots, even as productivity slumps

NEW YORK, Aug 29 (Reuters): North American companies snapped up a record number of robots in the first half of this year as they struggled to keep factories and warehouses humming in the face of an extremely tight labor market and soaring compensation costs.
Companies ordered a record 12,305 machines in the second quarter valued at $585 million, 25 per cent more units than during the same period a year ago, according to data compiled by the industry group the Association for Advancing Automation. Combined with a strong first quarter, the North American robotics market notched its best first half ever, the group said.
"Companies need to get product out the door - and so they need" new automation, said Jeff Burnstein, president of the Association for Advancing Automation, known as A3.
Eaton Corporation PLC, for example, is working on 150 different robot installations over the next year and a half in its electrical equipment factories in North America.
The incentives for companies to pursue a robot-enhanced workforce are obvious in the current tight labor market. With nearly two open jobs for every unemployed worker, employers are bidding up wages: Total US labor costs - covering wages and benefits - surged 5.1 per cent year over year in the second quarter, the most since the Labor Department began tracking it in 2001.
Yet if robots are designed to make workers more productive, that is not evident so far: Those thick order books come as US productivity fell in the second quarter at its steepest pace on an annualized basis since the government began reporting it in 1948.
One possible explanation is the distortions caused by the Covid-19 pandemic. The crisis saw huge shifts in the workforce, including an exodus of workers during the darkest days of the crisis who are only slowly filtering back into jobs. It is normal for workers to be less productive if they are moving into new careers or changing jobs in their existing fields.