Rockwell Automation Sees Data Centers, Labor Crunch Fueling Automation Demand

Automation demand remains resilient as manufacturers prioritize productivity and modernization despite inflation, tariffs and trade uncertainty. Labor shortages and difficult-to-fill roles are driving interest in automation, while data centers are emerging as a significant growth market. Rockwell expects opportunities from new capacity projects in semiconductors, life sciences and data centers, supported by investments in software-defined automation, artificial intelligence, robotics and intelligent material movement.

Trade-policy uncertainty is delaying some major capital projects, but Rockwell continues pursuing long-term investments, including a new Wisconsin plant.

Management reaffirmed its target of 6% to 9% annualized top-line growth through the cycle and expects pricing and efficiency initiatives to support margins.

Rockwell Automation NYSE: ROK executives said customer sentiment remains broadly positive despite inflation, tariffs and trade-policy uncertainty, with manufacturers continuing to prioritize productivity, modernization and automation investments. Speaking at Morgan Stanley’s 14th Annual Laguna Conference, Chief Executive Officer Blake Moret said North America remains an attractive market for manufacturing investment. While larger capital-spending projects have not yet broadly accelerated, he said Rockwell is seeing modernization activity across its traditional end markets as well as growth tied to the data centers.

“The underlying tone from our customers is distinctly positive,” Moret said. He cited low-double-digit growth in automotive during the most recent quarter, high-single-digit growth in home and personal care, and approximately 10% growth in life sciences in the third quarter. He also pointed to spending in warehouse automation, parcel handling and data centers.

Moret said labor scarcity remains a consistent driver of customer interest in automation. With unemployment around 4.1% to 4.2%, he said manufacturers are seeking technology that can help employees improve productivity while addressing difficult-to-fill manufacturing roles.

“Having the right amount of technology for the scarce resources that these manufacturers do have is really important,” Moret said. He added that data-center customers are focused on speed, modularity and time to value. Rockwell’s technology is increasingly being adopted in those facilities, which Moret said are beginning to resemble factories in their operating requirements.

Still, the CEO said uncertainty surrounding trade discussions, particularly those affecting the United States, Canada and Mexico, is holding back some larger investment decisions. He said reduced volatility in trade policy could help release capital spending, especially in automotive, where supply chains are closely integrated across the three countries.

Moret advocated for what he described as a targeted and pragmatic tariff approach rather than broad-based measures. He said tariffs should focus on non-market behavior and overcapacity from non-market economies, while allowing U.S. manufacturers clearer access to relief for critical production inputs. Despite tariff-related uncertainty, he said companies are generally continuing to pursue their longer-term strategies. Rockwell itself recently announced plans for a new plant near its Wisconsin headquarters, with first products expected from the facili...