Dive Brief:
- Tariff measures by President Donald Trump could slow capital investments in warehouse automation, driven by increased economic uncertainty, according to market research firm Interact Analysis.
- The tariffs are already causing headaches for some warehouse automation vendors, Rueben Scriven, a research manager at U.K.-based Interact Analysis, said in a recent blog post.
- “Our discussions with automation vendors indicate their customers are becoming increasingly concerned, leading to delays in major automation projects,” Scriven said. “Many decision-makers are hesitant to approve large capital expenditures (CapEx), fearing that future policy changes could undermine their investments.”
Dive Insight:
Trump’s shifting tariff moves in recent weeks and months have stoked global economic fears, creating uncertainty for business leaders.
About one in four finance chiefs say that changes to trade policy could negatively impact their hiring and capital spending plans this year, according to a survey released in March by Duke University and the Federal Reserve Banks of Richmond and Atlanta.
The on-again, off-again nature of the tariffs has further complicated the outlook, according to analysts.
The administration imposed sweeping new levies on imported goods on April 2, but has since walked some of them back. The U.S. has begun negotiations with several nations that on April 9 were granted a 90-day reprieve from high reciprocal tariffs, according to the White House. Baseline tariffs of 10% on goods from most U.S. trade partners remain in place, as do 145% duties on imports from China.
In a speech Monday, Federal Reserve Chair Jerome Powell indicated that recent federal policy shifts have eroded confidence among consumers and businesses, pushed up short-term expectations of inflation and triggered financial market volatility.
“Indeed, we’re currently experiencing the greatest levels of uncertainty around economic policy since the peak of the pandemic,” Scriven said in his blog post.
The warning from Interact Analysis comes as the warehouse automation market has already been struggling to rebound from a sales slump in recent years.
Warehouse automation orders declined by 3% in 2024 amid global macroeconomic challenges and geopolitical tensions, Interact Analysis reported earlier this year, while predicting a slow recovery period in 2025.
While Interact Analysis had already assumed a period of “acclimation” to Trump’s policies, the effects of his tariffs may justify a further downgrade to the research firm’s 2025 and 2026 projections, according to Scriven’s blog post.
The current tariff-fueled uncertainty is expected to lengthen sales cycles for warehouse automation technologies, particularly for high-cost, end-to-end systems that require long-term planning, he said.
The impact is further exacerbated by the “already high-interest-rate environment, which has been dampening investment activity for the past three years,” according to the analysis.
