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Conveyor Industry Anticipates Slow Growth

The Conveyor Equipment Manufacturers Association (CEMA), 105 member companies strong, provides industry performance statistics in 12 product categories. After two years of declining sales and industry contraction, the conveyor industry stabilized during 2010 and is showing encouraging signs of recovery.

Reported sales by CEMA member companies are up in all product categories. This is very good news after the disappointing performance experienced universally in 2009. At the most recent CEMA meeting in September 2010, the general outlook for 2011 was positive, with most company representatives reporting increases in both size and volume of quotations and bookings of conveying equipment. The participating companies in our survey are projecting this trend to continue for the next 12 months. This is a very good sign considering the fact that the industry is operating well under capacity.

In addition to the positive reports by CEMA member companies, the economic forecast presentation at the fall meeting for the economy in general—and the conveyor industry more specifically—was positive. Consumer confidence is improving in spite of slow private-sector job growth. The housing industry shows signs of stabilizing, although new housing starts remain down. The auto industry is back on track with steady sales because of improving consumer confidence. Raw materials costs have been climbing steadily for several years, but have peaked and appear to be stabilizing.

The leading indicators used to forecast where the conveyor industry is in the business cycle indicate we have begun a growth phase, but with a reduced GDP. We are headed the right way, but how fast and for how long may hinge on decisions made in Washington. Many questions concerning adjustments that could easily be made to taxes, interest rates, insurance programs and many other costs of doing business do create uncertainty and will have an impact as we go forward.

CEMA industry statistics and business cycle indicators confirm that the conveyor industry is now experiencing conservative growth that should continue into the future. The economic forecast for the conveyor industry is for slow growth in 2011, a welcome change from the recent past. The conveyor manufacturers of North America are returning to good health.

Material Handling Equipment Distributors Association
Meet the Author
Bill Pugh is president of Ralphs-Pugh Company, located in Benicia, California, and on the Web at www.ralphs-pugh.com.

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