Welding Industry Outlook

Resilient, Positive, and Increasingly Automated

BY GARY KONARSKA, EXECUTIVE DIRECTOR AND CEO OF THE AMERICAN WELDING SOCIETY (AWS)

If the attendance and attitude at FABTECH 2022 is an indication of what to expect in 2023, the U.S. welding industry has a strong outlook despite a muted economic forecast.

FABTECH 2022, held Nov. 8 – 10 in Atlanta, had a positive vibe among the approximately 30,000 attendees. Just like you can physically feel arc characteristics when welding, visitors felt a palpable energy and excitement at the show. Every person to whom I spoke had a positive experience, welcoming the opportunity to connect and interact directly with their peers at our industry’s largest in-person event. Over the last three years, a lot of people in the welding industry developed strong associations with each other online; Atlanta offered many of them the first opportunity to turn those affiliations into in-person friendships.

From a FABTECH attendance perspective, the Welding and Welding Automation Pavilions in C Hall and part of B Hall had perhaps the most consistent and busiest floor traffic because of the massive amount of automation and digital technologies. The most visible example was the number of cobots (and tooling and accessories) on display from traditional welding companies, established automation providers and start-up companies.

I’d be remiss if I didn’t also mention the amount of Professional Development Hours (PDHs) and Continuing Education Units (CEUs) available at FABTECH as part of the AWS Educational Events. In addition to the sheer magnitude of products and services offered through the show exhibitors, the ability to gain PDHs and CEUs at the show provides a solid cost justification for attending. For example, distributor personnel could have benefitted from participating in Tuesday’s seminars in the Welding Productivity Track on cobots, automation and understanding welding economics, productivity limitations and how to overcome them. These subjects are so important to our industry in 2023 that I am going to expand on them a little bit more.

Economic Context

With the growth of cobots and more user-friendly pre-engineered robotic cells, I feel confident in saying that automation has reached a tipping point. To fully appreciate the far-reaching implications of technology “beyond the arc,” first consider the convergence of several factors taking place right now.

I have talked with a number of manufacturers who see a robust sales cycle continuing until Q2 2023, but uncertainty beyond that. Experts, such as JPMorgan Chase, predict a mild recession beginning in late 2023. The company sees “increased spending related to infrastructure and the CHIPS and Science Act offset by reduced pandemic-related outlays. We see business investment up 3% in 2023, with solid spending on equipment and technology partly offset by lower spending on buildings, plants and structures.”

Deloitte projections based on Oxford Economics’ Global Economic Model anticipate 2.5% growth in GDP in manufacturing in 2023. After 29 consecutive months of growth, the November Manufacturing Purchasing Managers Index regis- tered 49% and dropped to 48.4 in December. This marks the first time the manufacturing sector contracted since May 2020. However, the labor market remains strong, with manufacturing employment increasing by 8,000 in December.

In typical times, these indicators might signal flat to slight down sales of welding equipment, but we live in anything but typical times. First, supply chain disruptions aren’t going anywhere. To buttress operations against the inevitable disruptions, there is more re-shoring of operations and sourcing of fabricated components closer to their point of use. This means that U.S. fabricators who can compete effectively have new opportunities for growth (as a side note, The Reshoring Initiative offers good guidance on how to make the business case for selling against overseas competitors).

Note that re-shoring does not mean bringing jobs back here and performing them the same way they do overseas. We cannot compete on low-cost labor. We can’t even find enough skilled labor to meet demand — and here’s where we bring the conversation back to automation and digital technology, which enable us to work more efficiently and intelligently.

The Game Changers

Cobots are a game-changer for high-mix, low-volume applications in welding, plasma cutting and post-weld grinding/ deburring. They are so easy to set-up and operate (often with smart phone or tablet-like simplicity) that they can arrive on a pallet in the morning and you can be making good parts by the afternoon (as proof points, see these cobot welding videos from Vectis Automation, FANUC and Acieta; these companies shared their wisdom in an automation panel discussion I moderated at FABTECH).

Cobots further flip the automation conversation because a critical mass of parts is no longer necessary to justify the cost of tooling (good tooling makes or breaks a standard robotic cell). Now, with a limited amount of modular tooling and a cobot on a cart, fabricators can profitably weld short runs of selected parts.

I say selected parts because the tasks best suited for cobots are the “boring” parts. If you spot an operator sitting at a bench and loading a few pieces into a basic fixture, that’s likely a good opportunity for you to recommend a cobot and help the

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