A New Building Regulator for Victoria

  

Reform of licensing, compliance, insurance and payments

  

 

 

Victoria in 1993 established the Building Control Commission, responsible for building regulation, the Building Practitioners Board to register and monitor practitioners conduct, and the Plumbing Industry Commission, responsible for licensing plumbers, drainers and gasfitters and plumbing work standards. In 2013 the Victorian Building Authority (VBA) replaced those regulators, becoming responsible for building standards, permits, surveyors, plumbers, contractors and subcontractors. In 2024, the Building Act was amended to make the State Building Surveyor a statutory position, to be the primary source of technical expertise for building and plumbing work.

 

In July 2025 the VBA became the Building and Plumbing Commission (BPC), with the Building Legislation Amendment (Buyer Protections) Bill 2025, as an integrated regulator that consolidated the functions of the VBA, Domestic Building Dispute Resolution Victoria and the Domestic Building Insurance arm of the Victorian Managed Insurance Authority. The goals are: 

·      To strengthen consumer protection through defect rectification orders and new insurance and bond schemes; 

·      To maintain standards in the building and plumbing industries through more effective regulation of builders and developers; 

·      To ensure consistency in compliance with the building code across the state; and streamline regulation with the BPC as the single point of contact.

 

The decision to replace the VBA with the BPC coincided with an October 2024 review by Weir Legal and Consulting Victorian Building Authority – The Case for Transformation. With seven detailed case studies, the review began by acknowledging ‘the dreadful experience these complainants have had in their interactions with the building industry, the VBA and the legal system.’  It found ‘the VBA management and culture failed consumers’, and builders were not made accountable for poor standards of work and unethical conduct. The VBA ‘failed to protect homeowners’ because of:

·      Ineffective regulation of practitioner conduct, weak enforcement and slow processes;

·      Consumer neglect with complaints that were lost, delayed, or ignored; and

·      Systemic regulatory failures such as combustible cladding and building defects in apartment towers [1].

 

This post first looks at the scope of the regulatory powers the BPC is given under the legislation and the changes from the system under the VBA, then the new domestic building insurance and apartment bond schemes are detailed. Issues with the legislation are discussed, including those raised by Master Builders Victoria, followed by the potential for issues with rectification orders and whether the BPC is responsible for providing technical solutions. Further reforms with a new domestic building contract and proposed changes to security of payment legislation are also discussed.  

 

 

Building and Plumbing Commission Powers

 

The BPC will oversee licensing, compliance, dispute resolution, and provide insurance coverage for defects. Current licenses will automatically transfer to the BPC and remain valid, but builders will need to meet minimum financial standards (that are not yet specified) to renew their licenses, have proof of insurance cover and provide a training plan for continuing professional development. There are new powers to combat phoenixing, where companies are liquidated to avoid debts and restarted under a new name. Builders who are directors of insolvent companies may face suspension or non-renewal of their licenses, with provisions for immediate suspension [2].

 

To protect homeowners, the BPC can order builders and developers to fix defective work for up to 10 years under Rectification Orders (ROs) that can be issued to whoever is responsible for carrying out the building work, including unregistered persons, subcontractors and owner-builders. The BPC can suspend licenses if builders fail to comply with ROs for defective work, which is a significant change. ROs can be issued to any class of building, including commercial buildings. Opportunities to rectify defects before an insurance claim is triggered start with the consumer resolving defects informally with the builder, and ending with the BPC issuing an RO. The viability of the scheme relies on the BPC compelling builders to rectify defects, reducing demand for insurance payouts.

 

For residential buildings of up to three storeys, Domestic Building Insurance (DBI) administered by the BPC will become insurance of ‘first resort’ and the BPC will set premiums. Homeowners have access to DBI in the form of ‘assistance’ when they suffer loss from incomplete, defective, or non-compliant work, in addition to the existing triggers for cover when a builder dies or becomes insolvent, disappears, or ignores a court order. Assistance will involve rectification or completion of the works or payment of compensation. The BPC can order builders to rectify defects, take disciplinary action against them, seek tenders for work, and recover amounts paid under DBI to fund repairs if the builder refuses. The new insurance scheme will start in July 2026, and may affect insurance premiums and underwriting conditions for builders. 

 

For residential buildings over three storeys, developers will be required to lodge a bond of 2% of the total build cost as security for covering the cost of fixing defects in common areas. Criticisms of the bond scheme are that it only covers common property, not private areas or structural defects, and doesn’t address issues related to faulty materials, design, or workmanship. For apartment buildings, ROs may be issued against builders and subcontractors, and also against developers. The BPC may withhold an Occupancy Permit if no bond is lodged or if serious defects are not fixed, and off-the-plan sales may be blocked. If an Occupancy Permit is issued without the developer having a bond, off the plan purchasers can rescind the contract. 

 

The developer bonds will be held by the BPC for two years after issue of an Occupancy Permit, and return to the developer if there are no outstanding defects. Recourse against or release of the bond will be subject to two reports from an independent assessor. A final inspection must be completed 21 to 24 months after occupancy, confirming defects have been rectified, otherwise the owners corporation can claim against the bond to fund rectification, with any unused portion returned to the developer. While the bond could be released 24 months after occupation, contested claims would take much longer.  Developers may apply to the Victorian Civil and Administrative Tribunal (VCAT) for review of a RO, and the BPC may apply to VCAT for an extension of time beyond the 10-year limit.

 

KCL Law posted: ‘these reforms mark a fundamental reset of Victoria’s residential construction sector. Consumer protection, professional accountability, and industry transparency are now front and centre, with significant implications for how developers, builders and regulators interact. But this is more than regulatory housekeeping, it’s a rebalancing of risk and responsibility across the entire supply chain. Builders are being asked to operate more like professionals than tradespeople. Developers must budget not just for construction but for compliance and regulators will no longer sit back and wait for failure before stepping in.’

 

 

Issues With the Legislation

 

There was a public consultation phase on the BPC. Although the submissions are not available online, the concerns they raised were widely reported. In particular, in May 2025 Master Builders Victoria (MBV) and Housing Industry Association (HIA) called for the Building Legislation Amendment (Buyer Protections) Bill to be subject to a review by a Parliamentary Committee, concerned that many provisions in the Bill increase costs for builders, unfairly penalise good builders, and would not do much to protect consumers from bad building practices. 

 

In a June post the MBV’s key concerns with the Bill were: 

·       ROs can be issued to both builders and developers, but only registered builders face the risk of losing their registration if they don’t comply. Developers, who are not required to be registered, face no equivalent consequences; 

·       The Bill places the entire burden of rectification on the builder, even when the defect is determined to be caused by another party, such as the designer; 

·       The home building sector is already seeing a decline in builder numbers due to frustration with an increasingly complex and biased regulatory environment; 

·       The definitions of ‘Defect’ and ‘Serious Defect’ are too broad. ROs should be limited to serious defects only, and if ROs apply to all defects a genuine appeal process must be provided for the builder.  

 

There are valid concerns here. In particular, has the ‘burden of rectification’ been placed solely on the builder, when other parties such as designers or engineers may be at fault? The legislation does not define how disputes over proportionate liability will be managed. Also, the broad definition of a serious defect may become problematic, and when combined with the lack of clear guidelines on liability, disputes may be more complex, protracted, and difficult to resolve. That said, the legislation does not prevent the builder chasing other parties who are at fault, and the builder and developer have responsibility to resolve a dispute and compensate for rectification.

 

The Victorian HIA compiles data on building registrations from the VBA annual reports. Their chart shows the number of registered domestic builders by company and by individual. The number of individuals registered as domestic builders has declined from a 2020-21 high of 17,545 to 16,669 in 2024-25, but the number of companys registered as domestic builders had a small increase. The number of finalised applications for building practitioner registration has also declined, from 2,821 in 2020-21 to 1,384 in 2024-25. These trends predate the transition of the VBA to the BPC, and not evidence of builders leaving the industry because of onerous or bad regulation. 

 

Figure 1. VBA data

Source: HIA

 

The 2024-25 VBA annual report’s table 4 with building and plumbing registration and licensing has more detail. Figure 2 shows that, between 2023-24 and 2024-25, there have been increases in the number of people registered as surveyors, inspectors and domestic project managers, and over 1,100 more licensed plumbers. The annual report says ‘the 18.7 per cent increase in the number of building surveyors registered is attributed to practitioners attaining registration through the mutual recognition pathway’, however The Age newspaper revealed 60% (123 out of 204) of new Victorian building surveyor registrations in 2024-25 through mutual recognition from Western Australia, where the qualification standards are lower and a bachelors degree is not required. There were also 4,936 engineer endorsements (for engineering wanting to work in building construction) were a four per cent increase over 2023-24.

 

Figure 2. Building and plumbing registration and licensing 

Source: 2024-25 VBA annual report, p. 40 [3].

 

 

A petition to the Legislative Council (from an unknown group called vicbuildersunite with only 300 signatures) also called for a review of the legislation, because it would ‘result in an anti-competitive situation through the creation of a government-controlled insurance monopoly.’ The petition then argued: ‘There is a lack of procedures to resolve disputes between builders and subcontractors whenever a disputes occurs over works which increases costs to consumers, a lack of accountability from third party building inspectors both private and regulated, a lack of transparency and fairness in how the regulator investigates practitioners and unfair costs associated with accessing building standards and technical information which includes the limited hours the regulators technical team are available.’ There are more like complaints than criticisms, and to suggest ‘a lack of transparency and fairness’ in a scheme that has not yet started is ridiculous. 

 

There are a few other issues that have been raised that should not take too long to be resolved: 

·      There is a lack of clarity on transition arrangements for projects already underway or with pre-existing contracts and how they are affected by the new bond requirements;

·      A RO may allow penalties based on single complaint without a thorough investigation; and

·      The minimum financial standards for builders have not been specified.

 

 

Issues with ROs and the Condensation Scenario

 

There are potentially issues with how ROs will be managed. The Explanatory Memorandum for the legislation says:

 

‘New section 75E sets out what a rectification order can require a person to do.  Subsection (1) provides that the person may be required to take any action or the action specified in the order to complete the building work, rectify the non‑compliant or defective building work, rectify any consequential damage associated with the building work or the defective or non‑compliant work, follow any directions or meet any standards in completing or rectifying the work or do any other thing in connection with the required completion or rectification activities.’

 

‘New section 75H specifies what information a rectification order must contain.  This includes a statement describing the action the person to whom the order is issued must (or must not) take for the purposes of the order, a statement describing any standards that must be met or directions the person must follow, a statement describing any other things the person must do for the purposes of the order, the date by which the order must be complied and any prescribed information.’

 

Tim Law, an architectural scientist specialising in mould in buildings, worries Victoria’s legislation expects the BPC to fix every problem it uncovers and the State Building Surveyor (SBS), as the designated technical authority, to provide solutions. The result could be the BPC becoming both enforcer and scapegoat, responsible not just for identifying defects, but for solving problems and inheriting liability for every systemic failure in Victoria's building industry over the past decade. If this is right, it will become a very expensive problem for the BPC as the costs for defect remediation will be carried by DBI, and the BPC will have financial responsibility for outcomes they cannot control. However, if the BPC follows the NSW example, it will issue ROs that define the problem for the builder to get advice on how to fix, and then show the BPC that they have done the work. 

 

 

Reform of Contract and Payment Legislation

 

In September 2025, the Domestic Building Contracts Amendment Bill 2025 (Vic) was passed by the Victorian Parliament and will take effect by or before December 2026, and will apply to domestic building contracts entered into after the commencement date. The BPC will take over the protection functions of Consumer Affairs Victoria, which posted the new laws will: 

·       Provide stronger protections for homeowners when signing domestic building contracts;

·       Set clear rules on when builders get paid. Deposit limits, progress payment stages, and progress payment limits can be set in regulations. Any payments for completed work will be subject to a proportionality requirement;

·       Allow the use of cost escalation clauses for contracts worth $1 million or more. But these clauses can only add up to 5% to a contract’s price, and extra consumer protections will also apply;

·       Separate preliminary agreements. Builders and clients can make their own agreements for developing plans, specifications and bills of quantity;

·       Ensure clearer contract requirements for all. Currently, some basic document requirements only apply to major domestic building contracts. These will now apply to all domestic building contracts;

·       Provide a single, simple process for contract variations for major domestic building contracts. This applies whether the homeowner or the builder requests a variation; and

·       Set stronger rights for homeowners to end a major domestic building contract. This will make it easier to walk away if needed.

 

The new contract has mandatory pre-contract disclosures, tighter variation controls, and new rules on progress payments and deposit limits. It recognises the role of modern methods of construction by linking progress payments to the actual proportion of building work done, which affects financing of modular and prefabricated construction. This important reform means prefabricated houses in Victoria will have their own framework for staged payments. New rules around fixed-price contracts reduce reliance on provisional sums and prime cost items. (See here and here).

 

Along with the Domestic Building Contract Act the Government is also improving security of payment (SOP) to reduce insolvency risk and protect smaller contractors, subcontractors, and suppliers. In September 2025 the Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Bill was made public. This is the first package of reforms from a 2023 Parliamentary Inquiry into SOP, and is based on 16 of the 28 Inquiry recommendations. Industry consultations are underway on a second set of SOP reforms. (See here, here, and here). The security of payment bill will align Victoria with other states by removing excluded amounts, which were unique to Victoria, and  unfair payment clauses, and make the enforcement of payments simpler. It will be easier to make claims and have them adjudicated if there’s a dispute.

 

Other reforms under consideration are a handover manual for completed buildings on their construction and maintenance. Building surveyors will be required to provide an information statement to the owner of the building or land within 10 working days of issuing a building permit. A Building Monitor as a dedicated advocate for Victorian domestic building consumers exists, but has not yet been funded. New categories to be considered for registration requirements are building consultants and site supervisors. Changes to approvals, registration and licencing, inspections and insurance requirements to promote modern methods of construction are being developed. An expert panel is advising on a rewrite of the Building Act. Further reforms could be increased mandatory inspections during construction, and introduction of 10 year defect liability insurance similar to the scheme in NSW. Statutory trusts for retention money as in Queensland are not proposed [4]. 

 

 

Conclusion

 

The Victorian Government wants higher accountability, lower defect rates, and faster dispute resolution in the construction industry, particularly for residential building. After a damming review highlighted the failings of the Victorian Building Authority a new regulator, the Building and Plumbing Commission, was established in mid-2025 with greater powers to address defects and management of new insurance and bond schemes to pay for rectification.

 

With the BPC able to issue Rectification Orders up to 10 years post-completion there is now a long period of liability for builders and developers, who will need to keep records of completed and disputed defects. There will be new, as yet unspecified, minimum financial standards for builders, and measures to prevent phoenixing of companies. The BPC will manage domestic building insurance and a developer bond scheme for apartments over three stories. The BPC can withhold an Occupancy Permit if no bond is lodged or if serious defects are not fixed, and off-the-plan sales may be blocked. If an Occupancy Permit is issued without the developer having a bond, off the plan purchasers can rescind the contract. As with any ambitious regulatory reform there are critics, and the relevance and accuracy of their arguments will be found over time. 

 

There are some potential problems for the BPC. How the transition for projects already underway or with pre-existing contracts that are affected by the new bond requirements will be managed is unclear. The ‘burden of rectification’ of defects is on the builder, although designers or engineers may be at fault, and the legislation does not define how proportionate liability will be managed. The definition of a serious defect is broad, and with the lack of clear guidelines on liability, disputes may be more difficult to resolve. The developer bond only applies to defects in common areas, not substandard work or faulty materials. However, the new insurance scheme should incentivise builders to rectify building defects as they are found by homeowners, preventing disputes.

 

In conjunction with the BPC legislation, there is a new Domestic Building Contract Act and new security of payment measures. The new contract has stronger protections for homeowners, tighter variation controls, and links progress payments to work done in a framework for modern methods of construction. A new security of payment bill will align Victoria with other states by removing excluded amounts. 

 

The concern of industry associations is that regulatory complexity, the cost of insurance and bonds, and minimum financial requirements, will result in builders leaving the industry, particularly smaller ones with limited capital, and reduce industry capacity. Residential building has always had high rates of entry and exit, because it is a cyclical industry with many small and medium size businesses. However, it would be difficult to know which exits are due to the new regulatory system, instead of industry conditions, retirement, or insolvency. 

 

The Weir Review of the VBA made 20 recommendations. Those on dispute resolution, phoenixing, domestic building insurance, inspections, occupancy permits and rectification orders have largely been adopted. Some like staged building permits, codes of conduct and training for builders and surveyors, and for BPC staff, are for the BPC to implement. The recommendations for declared designs, including plumbing designs, to be lodged on a government portal, as in the NSWDesign and Building Practitioners Act 2020, are not in the legislation, despite their importance in the NSW reform strategy [5].

 

Taken together, these reforms are a comprehensive upgrade of the construction industry’s regulatory framework in Victoria, particularly in the residential building sector. Consumer protection and builder accountability have been the focus, and the changes to risk and responsibility for compliance will affect all participants. For consumers the insurance scheme is a crucial change, because the builder does not have to be insolvent or disappeared to make a claim it makes insurance genuinely protective, and should lead to better quality of work. For contractors and subcontractors, an important change is the removal of excluded amounts in the new security of payment bill, and they can now claim for contested variations and costs through a simpler adjudication process. The BPC consolidates several regulatory bodies, has expanded powers, and is expected to be a more effective and proactive regulator than its failed predecessor. 

 

                                                               *

 

Acknowledgement: I’d like to thank David Chandler, Bronwyn Weir and Tim Law for their comments and assistance in preparing this post. Any mistakes or errors are mine.  

 

 

 [1] Flammable cladding in Australia and the second Grenfell Report were covered in this post.

[2] Insolvencies and entry and exit data were discussed in this post.

[3] The 2024-25 VBA annual report can be downloaded from

https://www.parliament.vic.gov.au/parliamentary-activity/tabled-documents/

[4] The Queensland statutory trust account systems was covered in this post. Regulation under the Queensland Building and Construction Commission will be the subject of a post in the near future. 

[5] The NSW reform strategy was outlined in this post.

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Embodied AI and General Purpose Robots

 Robot disruption is getting closer with humanoid robots

 

 

 

There has been a lot of attention on recent developments in artificial intelligence (AI), with new releases like GPT-5 and video AI systems like Sora and Nano banana. While all this has been going on there has also been rapid development of ‘embodied AI’, which adds AI to robots to make them more flexible and capable, and in particular to make humanoid robots that interact, are dexterous, and agile. National strategies like China’s Intelligent Manufacturing 2025, Japan’s robotics initiatives, Germany’s Industry 4.0, and U.S. innovation policies all actively promote the robot industry.

 

General purpose robots include quadrupeds, wheeled robots, and humanoids, as in the figure above. Some have a base with human arms and torsos, because the legs and waist of a humanoid are expensive. However, there are many new two legged humanoid robots intended for logistics, industrial assembly and automation tasks. Humanoid robots operate in an environment built for people, able to perform physical tasks in unstructured spaces with minimal reprogramming. 

 

Figure 1. US Humanoid robots 

Note: Sanctuary AI is Canadian.  Amazon has begun testing Digit at their R&D site. Hyundai owns Boston Dynamics and will use Electric Atlas in its Georgia US car plant

 

This post looks at the state of play of industry use of robotics and AI with  a focus on embodied AI and humanoids, starting with recent reports from McKinsey on automation and robotics. The 2025 International Federation of Robotics annual report on sales and use and a recent position paper on humanoids is covered, followed by a report on Chinese robotics shows in Beijing and Shanghai. China’s humanoid robotic strategy is discussed, then Australia’s robotics strategy and roadmap. There is a section on construction robots with a new McKinsey report on humanoids in construction, and discussion of the Robot as a Service model and the potential of humanoid subcontracting in construction.  The Amazon robotics system used in their newest warehouses is described. This post covers a lot of ground and is longer than usual. 

 

McKinsey’s Robotics Research

 

A June 2025 McKinsey report Will embodied AI create robotic coworkers? opens with ‘General-purpose robotics funding grew fivefold from 2022 to 2024, surpassing $1 billion in annual investment, with leading start-ups such as Figure AI, Skild AI, and Agility Robotics raising hundreds of millions of dollars. Patent filings have also surged, with a 40 percent CAGR in volume since 2022…. China has designated embodied AI a national priority, anchoring a $138 billion innovation fund’ [1]. McKinsey estimated that the general-purpose robotics market could reach about $370 billion by 2040.

 

The report found general purpose robots capable of grasping, lifting and placing items are not here yet, ‘but the building blocks are emerging fast.’ Barriers like task specific data and battery life will be addressed, supply chains for components and sensors will develop, and autonomy and dexterity will improve. The report had the figure below on industry tasks. 

 

Figure 2. Robots and tasks 

Source

 

There was a second McKinsey report in July, A Leap in Automation: The New technology Behind General-Purpose Robots. This starts with ‘advances in software are now making general-purpose robots viable by enabling them to learn, adapt, and act in real time, without human intervention. Simultaneously, hardware improvements are optimizing robot dexterity, sensing, and power.’ Foundation models provide the ‘most straightforward path to improve robot capabilities’ to skill levels comparable or greater than humans. That report concludes ‘software and hardware challenges ahead may seem daunting, but recent advances suggest that general-purpose robots could take workplace automation to new heights. The only questions are how quickly progress will occur and whether companies will embrace change rapidly or hesitate.’

 

Figure 3. Robotic capabilities and foundation models 

Source

 

Also in July, the McKinsey 2025 Technology Trends Outlook section on robotics noted that interest and innovation metrics for robotics increased by double digits from 2023 to 2024 and the market is expanding ‘with adoption in emerging sectors like agriculture and healthcare, the development of cobots, and broader deployment in manufacturing and logistics.’ (Cobots are collaborative robots for shared workspaces).

 

There were two examples of robotic foundation models: Covariant’s RFM-1 helps robots understand how objects move and interact in the real world, follow language-based instructions, and reflect on their own actions; and Figure AI’s Helix, a vision-language-action model that enables humanoid robots to perform complex tasks, enabling dynamic object recognition and collaboration without prior training. 

 

The Trends Outlook also had four examples of industrial applications: Amazon’s AI-driven cobots in its warehouses automate pick-and-place and palletization tasks; Tortuga AgTech’s robots identify and pick fruit; KFoodtech’s BotBob cooks traditional Korean stew; and Sanctuary AI’s advanced haptics tactile sensors and Meta AI’s Digit 360 have robotic dexterity. Two humanoid robot examples were: GXO Logistics agreement with Agility Robotics to deploy the Digit robot to automate tasks like moving totes and managing palletization; and Hyundai plans to deploy their Boston Dynamics Electric Atlas in automotive manufacturing as a cobot. 

 

McKinsey claims the market for service robots in areas such as logistics, hospitality, and agriculture has been growing at 20 to 35 percent annually, and many of these robots do not resemble humans. For example, autonomous mobile robots (AMRs) that transport medical supplies in hospitals or materials within a warehouse resemble a robotic household vacuum more than a person. 

 

Figure 4. European and UK humanoid robots 

Note: NVIDIA announced a partnership with 1X in March to develop home robots. Talos II is a heavy lift robot, Ameca a companion robot, and Kime operates a drinks stand.

 

International Federation of Robotics Annual Report

 

The International Federation of Robotics (IFR) is a nonprofit industry trade group. The membership in Figure 5 is mainly European, American and Japanese companies, and the absence of many Chinese manufacturers is striking (e.g. non-members include Siasun, Step and HGZN in industrial automation, and Unitree, UBTech, Hanson, and Hikrobot in service robots). The many Chinese R&D institutes are also conspicuous by their absence. 

 

Figure 5. IFR members  

Source. Note: In October 2025 ABB sold its robotics business to Softbank. 

 

Each year IFR issues a World Robotics Report, which has a press release with some figures on trends. The 2025 report came out in September with data for 2024, and is divided into two sections, one on industrial robots and the other on service robots. Industrial robots are ‘automatically controlled, reprogrammable multipurpose manipulator programmable in three or more axes’ and service robots are a ‘robot in personal use or professional use that performs useful tasks for humans or equipment,’ with the key difference that an industrial robot makes a physical product in a factory. Drones and autonomous vehicles are excluded. The IFR follows the International Standards Organisation definitions of robots.

 

Industrial Robots

 

KUKA (German), ABB (Swiss), Fanuc and Yaskawa (Japan) dominate industrial robot manufacturing with about 57% of the market. Other major manufacturers are Mitsubishi, Denso and Nachi (Japan), Omron and Standard Bots (US) and Staubli (Swiss).

 

IFR members reported a total number of industrial robots in operational use of 4,664,000, an increase of 9% on 2023. For many years the use of industrial robots was primarily in the two industries of electronics and cars but, while those are still the two biggest users, they now account for less than half of the market as the Metal and machinery and Other industries categories increase. In 2014 Automotive was 43% of the robot market, down to 23% in 2024. 

 

Figure 6. Industry use of industrial robots

 
Source

 

 

For the last four years, annual installations were over 500,000 units, and in 2024 Asia accounted for 74% Europe 16%, and the Americas 9%. IFR forecasts annual installations rising from 575,000 in 2025 to 708,000 in 2028, with 550,00 of the 2028 installations in Asia

 

China is the  largest market, with 54% of global installations and 295,000 industrial robots installed in 2024. Chinese manufacturers domestic market share has increased to 57%, up from 26% a decade ago, and China’s operational robot stock of over 2 million is the largest of any country. Japan is the second-largest market with 44,500 units installed in 2024 and 450,500 units in use. The US installed 32,200 and had 393,700 robots, South Korea installed 30,600 and had 392,900 robots, and Germany installed 27,000 and had 278,900 robots. These are by far the five largest markets. 

 

Service Robots

 

The IFR category of service, mobile, and medical robots includes robots that can autonomously drive around warehouses and pick items off shelves, robots for professional cleaning, search and rescue robots, and robots that can conduct laboratory tests or assist with surgery. There is much less data on service robots and the IFR notes: ‘All numbers based on a sample of 293 producers of total 944 manufacturers. Data is not projected to the whole industry. Sample composition varies each year.’ This recognises the absence of major robot developers and users like Amazon as members.

 

Figure 7. Service robot installations 2024

 
Note: Search, rescue and security robot installations were 3,128.

 

The IFR explains the ‘service robot industry is more heterogenous than the industrial robot industry’. There are 944 service robot producers, excluding prototyping services and system integrators, many companies are in the funding or prototyping stage and 80% are small or medium-sized enterprises with up to 500 employees.

 

In 2024, sales of professional service robots were over 199,000 units, and grew by 9% from 2023, and  for consumer use 20.1 million units were sold, an increase of 11%. Sales of  medical robots in 2024 were particularly strong with close to 16,700 units sold and a growth rate of 91%.

 

Humanoid Robots

 

The final page of the IFR press release is on humanoid robots, with four bullet points: 

 

·      There is no massive use today but serial production in preparation;

·      Manufacturers are building humanoid robots for R&D purposes for several years and producing on demand;

·      New companies in the market do build humanoids at a demonstrator or prototype stadium for first trial applications;

·      Application fields of humanoids still have to be determined and proven in practice.

 

Despite the garbled syntax, the IFR believes humanoid robots are not yet happening, because they are still in the R&D and prototype stage. There is also no section on humanoid robots on their web site. In August 2025 the IFR published a position paper on Humanoid Robots – Vision and Reality. That looked at regional differences: the US has a focus on practical applications; China is using humanoids in service sectors, and the strategy is to establish a supply chain for key components that is scalable; in Japan robots are regarded as companions rather than tools; and in Europe the focus is on ethics, human-centric design, and the social impact of robots. The paper concluded with ‘human-like dexterity and adaptability, humanoids are well placed to automate complex tasks with which current robots struggle using traditional programming methods. However, mass adoption as universal household helpers may not happen in the near or medium term.’

 

The narrow IFR/ISO definitions of industrial and service robots are becoming unworkable as autonomy increases and the range of robot forms widens to include AMRs, various drones, quadrupeds, and of course humanoids. While some of these are commonplace, like Amazon bots and autonomous mobile robots in warehouses, and others like autonomous drones for inspections and cleaning are becoming more widely used. 

 

Robots in China

 

There is an industry expo or event on automation and robotics most months of the year in China, and they are huge. The World Robot Conference 2025 was in Beijing in August. The five day event had over 1,500 exhibits from more than 200 companies, both Chinese and international, and featured ‘embodied AI’ in a wide variety of robots. There is a 20 minute video on YouTube with bird and quadruped robots, humanoid robots dancing, playing music, pouring drinks, greeting people, folding laundry, preparing and delivering meals, as well as the more familiar pick and place, fetch and carry, maintenance, monitoring and industrial robots. US company Skild demonstrated their ‘shared, general-purpose brain’, an AI that can learn to perform tasks across different robot forms. They intend to operate a business model similar to OpenAI, selling access to a foundation model for customers to create robots for different tasks in a wide range of scenarios. 

 

Then in  September there was the Robotics Show in Shanghai. Held annually since 2012, it covered everything from industrial and humanoid robots to logistics solutions, including collaborative robots (cobots), service robots, robotics for palletizing and material handling, and mobile systems. Exhibitors also included core component suppliers like servo motors, controllers, gear units and machine vision. This year’s event saw the launch of thousands of new products. 

 

Figure 8. Chinese humanoid robots 

 

In a report on the Shanghai Robotics Show, Foundamental partner Patric Hellerman says: ‘China's domestic robotics market provides manufacturers with a testing ground and scaling platform that no Western market can replicate, creating an insurmountable advantage in deployment experience and product iteration speed. For anyone building upstream robotics hardware (arms, cobots, electrical or mechanical components) in the West, this creates an uncomfortable business reality. Your ONE domestic market isn't large enough to provide equivalent learning opportunities. Your ONE customer base isn't dense enough to support the same rate of iteration. Your ONE ecosystem doesn't have the same depth of suppliers, integrators, and supporting infrastructure.’

 

Chinese manufacturers are selling thousands of units monthly to domestic customers, and intense domestic competition forces low prices, so Chinese prices are three to six times lower than Western market prices. A ‘thirty-thousand-dollar robot in Shanghai becomes ninety thousand to one hundred eighty thousand dollars in Munich or Manchester.’ Western competitors cannot match those prices ‘without destroying their business models entirely.’  Less intense Western competition allows market segmentation and premium pricing.

 

Hellerman argues China is following the same strategy used to build dominance in solar panels, batteries and EVs: ‘Western robotics companies burning venture capital to build factories are bringing equity tools to a debt fight, creating unsustainable cost structures that cannot compete with manufacturers accessing patient, cheap capital designed specifically for industrial buildout.’ Western venture capital is ‘structurally disadvantaged for capital-intensive hardware manufacturing competing against systematic debt availability, subsidies, and export incentives.’

 

Figure 9. More Chinese humanoids

 

In December there will be the Shanghai Humanoid Robot and Robotics Technology Expo, with ‘robot core components, full machine manufacturing, and system integration solutions’ the expo aims to accelerate innovation and commercialisation in humanoid robotics. ‘Backed by Beijing’s strategic support and deep technological resources, the expo promotes industrial scaling and collaborative application development across scientific, industrial, and service domains.’

 

Figure 10. Humanoid robots new in 2024

Source

 

China’s Robot Strategy

 

China has gone from being a technological follower a decade ago to an innovator in industrial automation and robotics, with advances in control systems, sensors, manipulators and drive mechanisms. Its robot industry has grown through a combination of research funding, technological breakthroughs, market diversification, and a great deal of policy support.The rapid growth of the country's robotics industry has robots now used in warehouses, education, entertainment, cleaning services, security inspection and medical facilities. A supply chain of components is now established. 

 

China is prioritizing AI development in robotics and embodied intelligence. The 14^th Five-Year Plan for the Development of the Robot Industry by 2025 was released in in 2021, followed by the Robot+Application Action Plan in 2023. In April 2025 the Ministry of Industry and Information Technology claimed the country holds over 190,000 active robotics patents, accounting for roughly two-thirds of the global total. The AI+ plan announced in August set adoption targets above 70% by 2027 and 90% by 2030, and an intelligent economy and society by 2035. The central government included embodied intelligence as one of four future industries in its 2025 work report: ‘We will establish a mechanism to increase funding for industries of the future and foster industries such as biomanufacturing, quantum technology, embodied AI, and 6G technology’ (p.18). 

 

A roadmap to 2030 adopted at the second Embodied AI Conference in March 2025 had three stages: 

1.        2025 to 2027, foundation: Shared datasets and open middleware.

2.        2028 to 2030, scaling: Deployment in factories, logistics, elder‑care pilots

3.        Post‑2030, generalization: Mass‑market humanoids and composite robots.

 

These stages are in progress. The Huisi Kaiwu platform was unveiled in March as a universal software system for robotic intelligence, allowing robots to be programmed for different tasks. The project is overseen by the Beijing Innovation Center of Humanoid Robots, jointly funded by the Ministry of Industry and Information Technology, the Beijing municipal government, private firms and research institutions. A standard for robotic elder care was released in February, with technical benchmarks for product design, manufacturing, testing, and certification. This year will see mass production of humanoid robots as UBTech Robotics secured orders for more than 500 from car companies, expecting to reach 1,000-2,000 orders by the end of 2025, Zhiyuan Robotics plans to expand sales to 3,000-5,000 by the end of 2025, and  Unitree has sold 1,000 humanoid robots.

 

A major problem for humanoid robots is the lack of training data because, unlike large language models that have been trained on the internet, they require data on work processes. To tackle this data deficiency AgiBot set up a data collection factory in Shanghai in 2024, using around 100 robots to gather 30,000 to 50,000 data points a day. At the end of the year AgiBot released the AgiBotWorld dataset, with ‘more than 1 million trajectories from 217 tasks across five major scenarios’ as open source training data.  

 

The Mercator Institute for China Studies 2023 report on China’s Innovation Chain found 173 High-Tech Industrial Development Zones (HIDZ). These are under the Ministry of Science and Technology and host 84% of State Key Laboratories. There are also 230  Economic and Technological Development Zones (ETDZs), which are similar to HIDZs but under the Ministry of Commerce. The report uses the Shenyang robotics and smart manufacturing cluster as an example. It has the  State Key Laboratory for Robotics at the Shenyang Institute of Automation, and the anchor tenant is Siasun, a robotics company spun out of  the Chinese Academy of Sciences (a government research agency) with subsidiaries in Singapore, Thailand, Malaysia, and Germany.

 

The Chinese government has established other innovation hubs focused on robotics supported by the national and provincial governments, with incentives for manufacturers to locate near the research centres. Dongguan robot city has a robotics research institute at the core, and in Shenzhen the Huawei (Shenzhen) Global Embodied Intelligence Industry Innovation Center started in 2024, partnering with local robotics firms Leju Robotics, Zhaowei Electromechanical, and Daju Robotics.

 

The Mercator Institute report concluded:  ‘China’s central government is focusing on extracting more economic value out of research spending and developing market-ready technologies that may provide an advantage in a geopolitical era where technological supremacy is seen as a key source of power. This desire to commercialize research has led China’s government to reorganize its innovation system around the idea of the innovation chain. To achieve this, Beijing has embarked on a long and painful process of reforming funding programs, institutional support, and zoning policies….Additional policies and updates to evaluation criteria for scientific research are also shifting emphasis to marketization over other R&D outputs.’ 

 

Figure 11. Humanoid robots forecast

Source

 

Australia’s Robotics Strategy

 

Australia's May 2024 robotics strategy is a ‘framework for a robotics and automation ecosystem to increase productivity and competitiveness.’ The strategy has four themes: national capability; increasing adoption; trust, inclusion, and responsible development; and skills and diversity. The strategy seeks to ‘use robotics and automation to help meet challenges like climate change, an aging population, and geopolitical risks.’ 

 

The strategy has as examples autonomous trucks in mining (700 in 2022), SwarmFarm Robotics in agriculture, and Finisar Australia manufacturing optical switching technology. It argues Australia has research expertise and growing local capability. However, a year and a half after the strategy was launched, its concluding claim is either aspirational or delusional: ‘Australia has unique advantages in contributing to the AI systems that will continue to revolutionise robotics into the future. Not only is Australia a leader in AI R&D, but our companies and researchers are already actively developing robotics software solutions to address problems across a range of industries.’ While mining and agricultural systems are world class, the lack of funding for R&D and  startups means Australia is far from the technological frontier. 

 

Robotics Australia Group Roadmap

 

The Robotics Australia Group (RAG) has over 70 members across 14 industry chapters. There was a 2025 update of their Roadmap, which said Australian companies are ‘starved’ of capital compared to international competitors, as over the last nine years 10 companies have raised only USD$255 million, and another 144 companies shared USD$30m [see 1]. The Roadmap has many examples of development and use of robots in Australian industries like autonomous machinery in mining, palletizing and lifting in manufacturing, and picking and packing in agriculture. There is a chapter on construction robots, with these examples of applications in Australia:

 

·      Autonomous or semi-autonomous earth-moving machinery;

·      Brokk remote controlled demolition robot;

·      Autonomous or semi-autonomous robotic cranes;

·      Modbotics manufactures timber house frames with a Randeck Robotics system;

·      Schindler’s RISE robot used for drilling in elevator shafts;

·      Robotics 3D concrete printing;

·      Aptella uses HP SitePrint for autonomous road marking and site layout;

·      Inspection and monitoring drones using Presien AI vision technology;

·      FlyFreely drone management platform;

·      FBR’s Hadrian X bricklaying robot, now available as a subcontract. 

 

Construction Robots

 

A post in August last year included 17 robots in use onsite: three for bricklaying, five for layout printing and surveying, four for reality capture and site monitoring, and one for each of drywall finishing, anchor hole drilling, rebar fixing, underfloor insulation, and solar farm construction. None were humanoids. Following the ISO definition used by IFR, excluded were exoskeletons, offsite manufacturing, remote controlled drones, autonomous excavators and graders, and onsite 3D concrete printing (which was the subject of this 2022 post).

 

Last week McKinsey published Humanoid Robots in the Construction Industry: A Future Vision (Oct. 17, 2025), and comparing that to their reports from a few months ago at the beginning of this post shows how fast the technology is developing. ‘To determine what construction tasks humanoids could perform in ten or more years, we assessed activities based on the level of collaboration involved, ease of training, dexterity requirements, and the structure of the work environment. We then categorized use cases according to the degree of relative task feasibility’, in Figure 12 below. 

 

Figure 12. McKinsey on construction tasks and humanoids

Source

 

McKinsey thinks construction leaders should not wait for full-scale deployment to begin preparing for a future in which humanoids and humans work together. Although humanoids are ‘a vision for the future workplace, rather than an immediate reality’, they are ‘expected to demonstrate high commercial feasibility in large-scale infrastructure projects and in residential, commercial, or institutional construction.’ The Bain and Company 2025 Technology Report has a section called Humanoid Robots: From Demos to Deployment that made the same argument on preparation, and forecast they will be used in construction in 10 years for onsite materials handling when battery life has been extended. 

 

It is worth noting some other examples of robots already being used on construction sites. First, robotic excavators. These systems are installed on excavators to allow autonomous operation: Built Robotics (US); Bedrock Robotics (US, raised $80m in July); and Gravis Robotics (Swiss). Second, equipment with remote operation:  Flywheel AI (US, excavators); Brokk (Sweden) demolition robot; and Nyro (US), a humanoid for demolition. Although only one of these examples is a humanoid, Nyro shows how humanoids are likely to make their way onto construction sites, as remote control allows the ‘brain’ to learn by doing, the same way as apprentices in construction have for centuries. Once ‘training’ is complete, autonomous operation follows, which is how robotic excavators have been  developed. 

 

The business model in construction could be ‘Robot as a service’ (RaaS), where businesses lease robotic devices to gain the benefits of automation, such as lower costs, flexibility, and scalability, without the large initial investment and maintenance associated with ownership. This would allow the industry’s many small and medium size contractors and subcontractors to use robotic equipment. With leased humanoids trained for materials handling or specific tasks, there may be robotics subcontractors where the manufacturer is also the subcontractor, like FBR is doing with their truck mounted Hadrian X bricklaying robot. 

 

Amazon’s Robotic System

 

Amazon has been developing robots for use in their warehouses since taking over Kiva Systems in 2012, and now has deployed more than 1 million robots. In 2024 a new fulfillment centre in Shreveport Louisiana uses eight robotic systems, plus two AI models to manage the robots and workflow, one a foundation model the other an agentic model. An October post followed a package through the 10 robots ‘that are supporting the next generation of package fulfillment at Amazon’:

1.        Sequoia uses AI, robotics, and computer vision to consolidate inventory and free up storage.

2.        Hercules is a drive unit that finds and brings pods of items to employees. 

3.        Titan is another drive unit that brings items to employees, it can lift twice as much as Hercules (up to 2,500 pounds, over 1,100 kilos). Titan and Hercules are confined to areas where only authorized robotic specialists can enter, and read barcodes that are stickered to the floor as navigation coordinates.

4.        Vulcan has a sense of touch, and picks and stows items from the highest and lowest inventory pods so employees don’t have to climb ladders or crouch.

5.        Blue Jay is a  ceiling-mounted robotic system that coordinates multiple robotic arms that simultaneously pick, stow, and consolidate packages.

6.        Sparrow is a robotic arm that picks up and moves individual items from containers into specific totes.

7.        Packaging station uses sensors to measure an order’s dimensions and creates a correctly sized, protective bag.

8.        Robin is a robotic arm that grabs packages from conveyor belts and puts them onto robotic drive units to be moved.

9.        Cardinal is similar to Robin, a robotic arm that uses advanced AI and computer vision to select one package from a pile, lift it with air suction, read the label, and place it in the appropriate cart.

10.  Proteus works with Cardinal to move carts from the outbound dock area to the loading dock. Proteus is Amazon’s first fully autonomous mobile robot, using sensors to detect and avoid objects. 

 

Conclusion

 

Robotic technology is rapidly advancing, and in environments like factories and warehouses the variety and use of robots is increasing quickly. For many tasks, non-humanoid automation is more practical, such as a fixed robot arm for welding or picking, and drive units or wheeled couriers for deliveries. Amazon is a good example with their AI coordinated robotic systems, and many firms will follow Amazon’s lead with automated stowing, picking, moving and packing items. However, the human form has the great advantage of functioning in an environment built for humans, therefore companies will keep investing in development of humanoid platforms.

 

A year ago humanoid robots were still at the experimental and prototyping stage.  Now, however, humanoid robots are breaking out, and some are already being used in accommodation, food services, manufacturing, transportation and warehousing. Although these are early days and many humanoid uses are more like trials than mass deployments, production is increasing quickly. The foundation models for humanoids being trained by Field AI and Figure AI will have construction industry applications. 

 

Figure 13 below is from a recent Bain and Company Brief that said ‘we anticipate steady growth in the deployment of humanoid robots through 2030, followed by a rapid uptick thereafter. Market projections range from $38 billion to more than $200 billion by 2035. Global funding in humanoid robotics start-ups is growing quickly, up from about $308 million in 2020 to $1.1 billion in 2024 [US dollars]. Several global tech leaders along with specialized robotics start-ups are ramping up production.’ 

 

Figure 13. Humanoid production plans

Source

 

The Chinese model of state-led development, long-term planning, supply chain and infrastructure investment, combined with selective integration into global markets, is working for humanoids as it did for solar panels, batteries and EVs. Whether one admires this model or not, it has been a success and has delivered technological progress. China is now restructuring and integrating the innovation chain, aiming at technological self-reliance and developing a supply chain of components for humanoids like servo motors, controllers, gear units and machine vision. Although at present Chinese robots may not be as sophisticated as some others, they are much cheaper.

 

Humanoid robots are now taking on tasks in controlled environments like car plants and warehouses, where they could quickly become widely used for repetitive tasks. In other industries there will be a period of human/robot collaboration, as robots take on simple tasks, and dull, dirty, or dangerous work. Then, as humanoid brains based on foundation models develop, and their strength, dexterity, and battery life improves, more applications will follow. Many of the jobs in structured environments that are repetitive and tightly controlled could be done by humanoids in the near future (say five years), and in ten years there will probably be humanoids doing some but not all of the work in most workplaces, including construction sites. 

 

                                                                    *

  

[1] Humanoid 2025 funding in USD includes:

·      Agility Robotics (US) $400m

·      Apptronik (US) $403m, has partnerships with Amazon, Mercedes-Benz, Walmart and Jabil to test Apollo in warehouses and automotive plants

·      Field AI (US) raised $400m for ‘Field Foundation Models’ (general purpose AI models)

·      Figure AI (US) over USD$1 billion raised in September valued the firm at $39 billion, has a multiyear agreement to deploy its robots in BMW’s South Carolina plant

·      Fourier (China) $109m 

·      Neura (Germany) $136m

·      Persona (US) $27m

·      UBTech (China) listed on Hong Kong stock exchange in 2023, raised $119m in 2025

·      Wandercraft (France) $75m

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