Factory Automation And Industrial Controls Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Global Factory Automation And Industrial Controls Market Trends and Insights

Industry 4.0 Adoption Acceleration

Manufacturers are converting legacy “automation islands” into synchronized cyber-physical ecosystems that link machines, logistics, and quality loops in real time, yielding shorter changeovers and higher overall equipment effectiveness. Digital-twin deployments jumped to 68% of surveyed German plants in 2025, up from 41% two years earlier, with typical payback falling below 18 months. Japan budgeted JPY 120 billion (USD 800 million) in grants for small and midsized enterprises to install collaborative robots and IoT sensors, expanding automation beyond mega-plants. The emphasis on retrofit projects is stimulating demand for modular edge gateways, time-sensitive networking, and protocol-agnostic controllers capable of coexisting with 20-year-old equipment. As a result, capital spending is spreading across thousands of mid-tier facilities, cementing a broad, sustainable growth path for the factory automation and industrial controls market.

Energy-Efficiency Mandates and Cost Pressure

The European Union’s Ecodesign Regulation 2024/1781 and updated United States motor standards are pressing manufacturers to adopt IE4-IE5 motors, variable-frequency drives, and advanced power analytics, reducing electricity use by 15-25%. Average industrial power prices in Europe reached EUR 0.28 per kWh (USD 0.30 per kWh) in 2024, more than double pre-2022 levels, putting energy optimization at the center of board-level discussions.^{[1]Eurostat, “Electricity Price Statistics,” ec.europa.eu} Automation vendors are translating the regulations into commercial traction; Schneider Electric reported a 22% rise in EcoStruxure-enabled drives in 2025 as customers raced to certify plants under ISO 50001. The replacement wave is especially strong in energy-intensive segments such as chemicals and metals, lifting recurring software revenue tied to energy dashboards and AI-based load balancing. These factors add durable lift to the factory automation and industrial controls market.

Rising Labor Shortages in Manufacturing

Japan’s manufacturing workforce shrank by 1.2 million between 2019 and 2024, pushing the average factory-floor age to 47 years. German plants faced 320,000 unfilled jobs in 2024, mostly in machining and quality inspection roles. To sustain production, automotive suppliers grew collaborative-robot fleets by more than one-third in 2024, placing flexible cobots alongside human teams on tasks that demand dexterity but little oversight. Autonomous mobile robots, machine vision, and adaptive grippers that can migrate across lines are displacing fixed-path capital. The structural nature of labor shortages elevates the value proposition from cost reduction to business continuity, ensuring multiyear demand for field devices within the factory automation and industrial controls market.

Government Stimulus for Digital Factories

Capital subsidies are removing financial friction from automation projects. The United States CHIPS and Science Act earmarked USD 39 billion in grants and USD 75 billion in loan guarantees, contingent on real-time monitoring and predictive maintenance integration.^{[2]U.S. Department of Commerce, “CHIPS Act Funding,” commerce.gov} India disbursed INR 45 billion (USD 540 million) to pharmaceutical manufacturers installing automated bioreactors and continuous plants. China’s dual-circulation policy boosted domestic PLC shipments by 28% in 2024 as firms localized control technology. These programs reward measurable productivity gains, steering adopters toward software-defined architectures that can be upgraded over the air. Subsidies therefore act as both demand accelerator and technology roadmap catalyst, reinforcing long-term expansion of the factory automation and industrial controls market.

High Upfront CAPEX of Automation Projects

Integrated MES-SCADA deployments often require USD 2-8 million per site, with paybacks exceeding three years in thin-margin sectors such as food processing. Access to low-cost financing is uneven, particularly in South America and parts of Southeast Asia where interest rates remain above 12%. Although leasing and automation-as-a-service models promise lower entry hurdles, customers remain wary of data ownership and long lifecycle dependencies. ABB disclosed that subscription-based robotics accounted for only 9% of its 2025 robotics revenue, underscoring the early stage of alternative financing. Consequently, capital constraints could dampen near-term adoption across smaller manufacturers, trimming growth of the factory automation and industrial controls market.

Cyber-Security Vulnerabilities in OT Networks

Forty-seven vulnerability advisories targeted SCADA and HMI products in 2024, including flaws in popular platforms that enable remote code execution. A ransomware assault on a European chemical plant halted output for 11 days and cost EUR 35 million (USD 38 million) in damages. Uptake of zero-trust segmentation remains below one-third of manufacturers, keeping the attack surface wide. Compliance with IEC 62443 can add 8-12% to total project cost, elongating approval cycles. Until secure-by-design controllers and encrypted protocols become standard, cybersecurity anxieties will curb speed of adoption in critical infrastructure segments, tempering expansion of the factory automation and industrial controls market.

Segment Analysis

By Product: Field Devices Sustain Double-Digit Expansion

Field devices generated the fastest growth in 2025 and are set to expand at 9.71% through 2031, outpacing control-system hardware that still held 54.31% of the factory automation and industrial controls market share in 2025. Robot installations reached 553,000 units in 2024, with automotive and electronics buyers taking 62% of shipments. Machine-vision revenue climbed 18% at Cognex during 2024 on the strength of AI-powered defect detection. These investments illustrate an industry pivot from programmable logic controllers toward intelligent endpoints that carry local analytics and 5G or IO-Link Wireless connectivity.

This transition reshapes value propositions. Controller differentiation now turns on ecosystem compatibility and software toolchains rather than scan-time benchmarks. Human-machine interfaces add augmented-reality overlays that cut batch changeovers by up to 30% in mid-volume lines. Hybrid control architectures mix deterministic PLC loops with cloud analytics, sidestepping full rip-and-replace costs. As older SCADA systems approach obsolescence, upgrade discussions increasingly center on seamless migration paths instead of pure hardware refresh, anchoring multi-cycle revenue for the factory automation and industrial controls market.

By Component: Software Captures a Growing Slice

Hardware still represented 68.17% of revenue in 2025, yet software is projected to rise at an 10.93% clip, the highest among components. Subscription models now dominate rollouts, illustrated by Siemens, whose MindSphere and Xcelerator portfolios drove 16% software growth in 2025 while hardware rose only 4%. Emerson’s recurring software topped 22% of automation sales in 2024, delivering gross margins above 70%, versus the mid-30% range for hardware.

Low-code configuration tools such as EcoStruxure Automation Expert 2.0 reduce engineering hours by up to half, broadening user bases to process engineers and operations managers. Services revenue, long dominated by on-site commissioning, is shifting toward remote diagnostics and AI-assisted troubleshooting, which lowers travel costs and carbon footprints. Collectively, these dynamics deepen software’s pull-through effect on controllers and drives, reinforcing hybrid platform strategies across the factory automation and industrial controls market.

By End-User Industry: Pharmaceuticals Pace the Upswing

Automotive lines maintained 23.76% of 2025 revenue, reflecting long-standing automation density. The pharmaceutical segment, however, is forecast to expand at 9.43% through 2031, buoyed by continuous bioprocessing, real-time release testing, and stringent FDA guidance on process analytical technology.^{[3]U.S. Food and Drug Administration, “Process Analytical Technology Guidance 2024,” fda.gov} Eli Lilly allocated USD 4.5 billion in 2024 to a fully automated biologics campus that employs digital twins and inline chromatography to trim batch cycles by 40%.

Beyond life sciences, chemical complexes are layering advanced process control onto legacy distributed control systems to shave energy costs amid volatile natural-gas prices. Food-and-beverage processors deploy wash-down-rated robotics to meet traceability mandates, while semiconductor fabs demand vacuum-compatible motion systems with sub-micron accuracy. The spread of sector-specific templates and validated libraries allows vendors to reuse code across plants, curbing commissioning risk and amplifying addressable scope inside the factory automation and industrial controls market.

Note: Segment shares of all individual segments available upon report purchase

By Control System Architecture: Open Standards Progress Rapidly

Proprietary architectures still accounted for 49.54% of revenue in 2025, yet open frameworks built on OPC Unified Architecture are slated for a 10.21% CAGR through 2031. The OPC Foundation certified more than 15,000 OPC UA server implementations by late 2024, a testament to rising multi-vendor integration. Volkswagen now mandates OPC UA compliance for all new production assets, driving ripple effects across tier-1 suppliers.

Hybrid arrangements that embed proprietary safety loops but expose non-time-critical data through open middleware balance determinism with flexibility. While integration overhead persists, the ability to deploy best-of-breed robots, sensors, and analytics outweighs the cost for most greenfield projects. Accordingly, ecosystem alignment rather than hardware speeds will determine winners in the factory automation and industrial controls market.

Geography Analysis

Asia Pacific accounted for 37.68% of the factory automation and industrial controls market in 2025 and is projected to post a 9.56% CAGR through 2031, underscoring its dual role as a manufacturing hub and policy engine. China’s dual-circulation push triggered a 28% rise in domestic PLC and drive shipments in 2024 as producers localized supply chains. India disbursed INR 120 billion (USD 1.44 billion) in production-linked incentives for electronics, pharmaceuticals, and auto components, subject to minimum automation thresholds. Japan granted JPY 120 billion (USD 800 million) to small and mid-sized enterprises to support robot adoption, extending automation beyond the automotive nucleus. South Korea sponsored 3,200 smart-factory projects in 2024, spanning semiconductor, display, and battery facilities.

North America remains pivotal despite slower growth, powered by federal incentives that tether funding to Industry 4.0 practices. The CHIPS Act’s USD 39 billion grant pool obliges real-time monitoring and predictive maintenance in new fabs. Mexico and Canada are benefiting via near-shoring, funneling orders to motion-control suppliers. Europe commands mature penetration yet maintains leadership in digital twins and energy-efficient retrofits; 68% of surveyed German plants had adopted at least one digital-twin application by 2025. High power prices propel upgrades to IE5 motors and drives, reinforcing refresh velocity.

South America, the Middle East, and Africa collectively trail in spending but register strong point projects tied to extractive industries. Brazil’s Petrobras earmarked USD 2.1 billion for digital oilfield platforms in 2024, including autonomous drilling and SCADA upgrades. Gulf refineries adopt advanced process control to meet energy-intensity targets, while South African miners deploy wireless sensor networks to improve asset uptime. Although volumes are smaller, the installed base is younger, providing an opening for open-standard architectures and cloud-native analytics to leapfrog legacy solutions. Collectively, geographic diversification underpins a resilient trajectory for the factory automation and industrial controls market.