Barclays Research Expects Humanoid Robots to Fundamentally Reshape the Real Economy

LONDON--(BUSINESS WIRE)--May 19, 2026--

In this year’s Equity Gilt Study, Barclays Research examines how physical AI will move beyond the digital realm and into the real economy, with humanoid robots set to reshape productivity, labour markets, geopolitics, and long-term asset returns. While equities delivered strong real returns in 2025, the report argues that the more important shift is structural, marked by higher capital investment, rising productivity, and a repricing of growth, inflation, and capital across regions and asset classes. At the centre of this shift is the emergence of humanoid robots.

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“Humanoid robots represent the next frontier of AI, combining intelligence with physical capability,” said Ajay Rajadhyaksha, Global Chairman of Research. “Their effect could extend well beyond technology, reshaping the structure of the global economy.”

Humanoid robots: the next frontier of automation

Automation is entering its third phase, according to Barclays Research analysts. Humanoid robots, enabled by advances in artificial intelligence, mobility, and battery systems, are designed to operate in human environments; use existing tools; and perform full jobs, rather than isolated tasks. As the costs of producing the robots decline and deployment accelerates, Barclays Research estimates the market for humanoids could reach $200 billion by 2035, reshaping labour supply, productivity, and investment opportunities across the global economy.

China leads in robotics

Barclays Research analysts find that China is already the centre of gravity for the global robotics economy. Supported by unmatched scale in manufacturing, deep supply chains, and state-backed industrial policy, China accounted for 85 percent of humanoid deployments in 2025 and controls many of the critical inputs needed to scale the technology. If current trends persist, Barclays Research estimates that robots could fill up to 60 percent of the workforce gap created by China’s aging population by 2035, helping sustain economic growth and reinforcing robotics as a key pillar of its economic and geopolitical strength.

How robotics will rewire economies

Automation has long supported productivity growth, but its effect has largely been limited to specific tasks. Barclays Research analysts argue that humanoid robots extend automation not just to entire roles, but to those that until now could not be automated. Historically, strong productivity gains in sectors such as manufacturing coincided with a declining share of GDP, while more labour-intensive sectors expanded, a pattern known as the Baumol effect. By increasing the substitutability between labour and capital in tasks that have resisted automation, humanoids could ease these constraints and help shift that dynamic. Barclays Research also notes that more than 60 percent of employment in 2018 was in roles that did not exist in 1940, suggesting humanoids are likely to reshape, rather than reduce, the future of work.

Will physical AI’s displacement effects hurt asset prices?

Barclays Research analysts argue that physical AI is not a zero-sum shock and that markets may be underestimating its positive effect. By expanding the production frontier, rather than simply redistributing income, humanoid robots strengthen the case for higher productivity, higher equilibrium real rates, stronger earnings growth, and improved long-term asset returns. While adoption will reshape labour income and shift sectoral winners and losers, the overall effect is likely to be positive for growth and markets.

Notes to editors:

Barclays Equity Gilt Study is a flagship annual publication that combines market-leading macro analysis with a unique multi-asset dataset spanning over 100 years. It provides uniquely rich data and commentary on long-term asset returns in the UK and US. Data for the UK goes back to 1899, while the US data, provided by the Center for Research in Security Prices at the University of Chicago, runs from 1925.

About Barclays Investment Bank

Barclays Investment Bank helps money managers, financial institutions, governments, supranational organisations and corporate clients manage their funding, investing, financing, and strategic and risk management needs. It is comprised of the Investment Banking, Global Markets and Research businesses.

As a leader in global finance, with comprehensive UK consumer, corporate and wealth and private banking franchises, a leading global investment bank and a strong, specialist US consumer bank, Barclays aims to provide a better financial future for our customers, clients and communities. www.barclays.com/ib

Barclays EGS 2026

NEW YORK (AP) — Trains are rolling again on the Long Island Rail Road on Tuesday after a deal was reached to end a strike that had shut down the busiest commuter rail system in the country.

The first trains departed from Manhattan's Penn Station and Grand Central Terminal shortly after noon on Tuesday. Trains were also scheduled to depart from other stations on the four main branches of the system after that time, with full service expected to be back across all branches at 4 p.m. in time for the evening rush.

“It was a difficult circumstance, but I’m very happy and I’m very pleased that we’re back in business,” said Robert Free, president of the LIRR, shortly before the first trains departed. “We’re back to doing what we do best, and that’s providing service, and keeping this region moving.”

Commuters in the eastern suburbs of New York City still had to muddle through another tough morning rush hour, as trains weren't set to be running in time for the commute into work after the agreement was reached late Monday.

The LIRR still urged riders to work from home again Tuesday if possible. Shuttle buses were being offered from a handful of locations on Long Island to subway stations in New York City.

Five labor unions representing about half the train system’s workforce went on strike at 12:01 a.m. Saturday, halting service for roughly 250,000 commuters who use the rail system that connects New York City to its eastern suburbs every weekday.

Hallie Kessler was among the weary Long Island commuters who welcomed the strike's end. With the trains out of service, the 24-year old speech therapist commuted three hours home from her job at a public school in the New York City borough of Queens on Monday.

“Obviously I wish trains would be running when peak hours start so I could avoid the long morning commute, but happy to not deal with it in the afternoon when I’m leaving work,” Kessler said. “Curious what the deal says about future fares, which has been a big concern, but we’ll see.”

New York Gov. Kathy Hochul and railroad officials have said they're not at liberty to disclose details of the new contract terms until they're voted on and approved by union members. But the Democrat, who is up for reelection, stressed the deal won’t increase fares or taxes and will give unionized workers the fair wages they deserve.

The first impacts of the walkout were felt over the weekend, as baseball fans had to find other ways to get to Citi Field in Queens to see the New York Mets take on their crosstown rivals the New York Yankees.

Hochul said the deal ensures basketball fans won't meet the same fate as they travel to watch the New York Knicks continue their playoff run on Tuesday night at Madison Square Garden, which is located directly above the LIRR's Penn Station hub in Manhattan.

The unions — which represent locomotive engineers, machinists, signalmen and others — and the Metropolitan Transportation Authority had been negotiating a new contract since 2023, but talks had stalled over salaries and healthcare.

The unions have said raises were needed to help workers keep up with inflation and the rising cost of living in the New York City area. The MTA had said the union’s initial demands would lead to fare increases and set a difficult precedent for negotiations with other transit unions.

The strike was the first walkout for the LIRR since a two-day strike in 1994.

Long Island Rail Road workers walk on the picket line outside of Penn Station on the third day of their strike, Monday, May 18, 2026, in New York. (AP Photo/Heather Khalifa)

Workers stand near the Long Island Raill Road ticketing counter in New York's Penn Station, Tuesday, May 19, 2026. (AP Photo/Richard Drew)

Rail passengers pass the Long Island Rail Road waiting room in Penn Station, in New York, Tuesday, May 19, 2026. (AP Photo/Richard Drew)

Tracks are empty at Mineola train station as Long Island Rail Road workers enter the third day of their strike, Monday, May 18, 2026, in Mineola, N.Y. (AP Photo/Heather Khalifa)

Long Island Rail Road workers walk on the picket line outside of Penn Station on the third day of their strike, Monday, May 18, 2026, in New York. (AP Photo/Heather Khalifa)

Commuters board buses to Long Island outside of the Jamaica–179th Street station as Long Island Rail Road workers enter the third day of their strike, Monday, May 18, 2026, in New York. (AP Photo/Heather Khalifa)

Long Island Rail Road trains sit in the West Side Yard on the first day of a strike, Saturday, May 16, 2026, in New York. (AP Photo/Heather Khalifa)