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Construction Disruption – Robots are Super-Powering Industrial Productivity

Automation and robotics are disrupting all industries. However, their impact is being felt most particularly in construction these days, considering the technology has not had much penetration into the sector yet. Construction sites present tougher challenges, because of their unpredictable environments and the presence of humans, which is why automation efforts have been limited to the periphery, such as using drones to keep track of building materials. While productivity in U.S. manufacturing, retail and agriculture has increased as much as 15 fold since 1945, the construction industry has remained flat. Rates of productivity for building single-family homes, for instance, had only increased at a rate of 1.1% per year between 1987 and 2015, compared to an average of 2.2% a year for other industries.

In a similar show of lacking efficiency, it takes about half a million work days to erect a 30-story office tower, a number that hasn’t changed much over the years. With at least a million workers set to leave or retire from the construction business over the next decade, a massive labor shortage threatens the already problematic situation. In response, Shimizu Corp., a Japanese general contractor, is becoming one of the first to implement robotics-based solutions by introducing robots that can weld beams, haul supplies and install ceiling panels. Shimizu’s Robo-Carrier automated forklifts will be equipped with laser rangefinders to navigate environments and their Robo-Buddy will be able to lift and carry 30 kilograms of materials at a time. While the robotic labor will be more of a trial run, amounting to about 1% of the total for a typical high-rise, what is learned and improved upon will accelerate the adoption of worksite-enabled automation.

America is also feeling a labor squeeze as 70% of construction firms surveyed by the Associated General Contractors of America say they are having trouble finding skilled workers. Similar applications for robots are being implemented on American sites as well. San Francisco-based Built Robotics says its autonomous track loader, which has been leveling ground at Bay Area construction sites since last fall, will be a safer, more efficient alternative to using human drivers — and the company plans to expand its technology to other heavy machinery. The company is currently charging a discounted rate for developers to use its autonomous track loader as part of a pilot program, and expects their tech to be cheaper than the $100 per hour it will cost to rent a regular compact track loader in the area, as well as purchasing one from Bobcat for around $63,000 while paying someone to drive it.

There is also the element of partial automation – humans working in tandem with robots as opposed to being replaced by them – which will play a large part in tomorrow’s construction tech. Workers at a Colorado masonry company were recently introduced to a bricklaying robot worker named SAM, or Semi-Automated Mason. Using a robotic arm and conveyor belt, SAM can lay 3,000 bricks in a typical eight-hour workday. Similar machines could be used to automate similar routine tasks with some human oversight. Hadrian X by Fastbrick Robotics, a similar bot equipped with specialized technology, can lay a residential house from the ground up, on site, in 2 days. Hadrian has overcome environmental issues by using the precision technology Dynamic Stabilization Technology (DST), measuring external factors like wind and temperature an astounding 2000 times per second, accounting for them in real time, and managing to lay bricks with an error margin of just 1 millimeter.

Further down the line, we can expect to see industrial exoskeletons, which are robotic units that a worker can manipulate with their own body’s movements. Industrial application is currently the fastest growing area of research for different categories of exoskeletons for specific uses, like ones that hold tools, convert into chair-like supports that lock in place, promote posture, and grasp items with powered gloves. Sarcos Robotics is a front-runner in exoskeleton tech, a market expected to be valued at more than $507.3 million by 2025. The company is already in the later stages of developing 3 different products including a set of robotic arms, each with a 500-pound lifting capacity, that is able to perform tasks like welding.

Offsite applications are also transforming construction. The market for prefabricated buildings, structures made of 3D printed components that can be easily assembly later, is set to grow from $125 billion in 2015 to $177 billion by 2021. Just this month, a new 3D printed house was unveiled in central Milan, made up of 35 modules that were each been printed in 60-90 minutes. The full house was printed in just 48 hours effective time.

Robotics are forecast to automate or semi-automate up to 40% of construction jobs by the mid-2030s.

Investors can gain exposure to robotics and automation via the Robotics and Automation ETF (ROBO) or the Global X Robotics & Artificial Intelligence ETF (BOTZ), and to the construction sector via the Industrials ETF (XLI). We added Long Robotics and Automation as a theme on July 20, 2017. Over that period, the ROBO and BOTZ ETFs have more than doubled the S&P 500’s performance gain of 6.69%, returning 14% and 20% respectively.


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