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Conveyor Industry To Remain Slow In 2010

CEMA reports lag in both unit and bulk handling conveyor equipment.

The Conveyor Equipment Manufacturers Association (CEMA) consists of 95 member companies in the United States, Mexico and Canada who represent the leading North American producers and designers of conveying equipment and accessories. Approximately half of CEMA member companies focus on unit handling while the rest specialize in bulk material handling applications, giving a good cross-section of an industry that represents about $7 billion a year in shipments.

CEMA members produce many industry standards and engineering guides and have developed a highly successful safety label program. In 2009, CEMA published the industry’s first comprehensive book on unit handling, entitled CEMA Application Guide for Unit Handling Conveyors. In addition to its other activities, CEMA collects and reports monthly order and shipment statistics. The latest statistics available from CEMA show that the industry bookings shrank 25.5 percent from July 2008 to July 2009. Total shipments for the same period show a decline of 19.2 percent. For further detail, news releases on the CEMA monthly statistics are available on CEMA’s Web site.

At the organization’s March 2009 Annual Meeting, CEMA member companies expressed the view that business would be down slightly in 2009. In September 2009, CEMA held its annual fall meeting. The forecasts expressed at this meeting for the remainder of 2009 and through 2010 were much more conservative. In general, CEMA members look at 2010 with caution and low expectations. A common comment at the recent meeting was, “We think we have hit bottom.”

Unit Handling Outlook
Consumer spending and MRO activity drives investment in unit handling equipment, and this spending was estimated to be 3 percent to 4 percent less in 2009 than 2008. Factory utilization is at an all-time low at just under 67 percent. Capital spending usually does not rebound until utilization is 75 percent or more. There has been some consolidation in the unit handling sector, and more is anticipated. Unit handling orders tend to lag the general economy by 9 to 12 months, but with low factory utilization and a shrinking economy, the lag until recovery will probably be prolonged.

Bulk Handling Forecast
Activity in the industrial, construction and mining sectors drives investment in bulk handling equipment. Many of the CEMA bulk material handling members do business globally. While there are some bright spots internationally, the North American business is depressed. The recession has reduced demand for durable goods and the uncertainty about U.S. tax and energy policy has led many producers of basic materials to close production lines, idle mines and defer capital investment. Bulk material handling orders tend to lag the general economy by 6 to 9 months, but with the depressed demand and regulatory uncertainty, CEMA members feel the chance for a recovery for the bulk handling sector in 2010 is remote. There are opportunities in North America primarily related to safety and environmental control.

Material Handling Equipment Distributors Association

Todd Swinderman Meet the Author
2010 CEMA President R. Todd Swinderman is chief technology adviser for Martin Engineering, located in Neponset, Illinois, and on the Web at www.martin-eng.com. CEMA is located in Naples, Florida, and on the Web at www.cemanet.org.


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