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Storage & Handling Recovery To Accelerate

In late 2009, we were forecasting that storage equipment would be down from 2008 levels by 37.5%. The actual fall-off was closer to 45%.

At the time, we saw 2010 growing in the single digits. As it turns out, that part of the forecast was accurate. The final 2010 numbers should reflect a rebound of just over 9% over 2009.

For 2011, we see further growth in the range of 17% to 20%. While still off 2007-2008 levels, the recovery is progressive and being led by most major end-use sectors now in the early stages of their growth cycle, according to the Manufacturers Alliance. Among those sectors are: HVAC, housing starts, mining and oilfield equipment, electronics, industrial machinery, electric lighting equipment, engines and turbines, and power transmission equipment, just to name a few.

Material Handling Equipment Manufacturing
Each year, MHIA produces its market forecast for Material Handling Equipment Manufacturing (MHEM). This year’s chart shows that in 2009, new orders contracted 34.3%, shipments went down by 33.4% and domestic demand (shipments plus imports less exports) decreased by 33.7%. Last year saw recovery in all three areas, as new orders grew by 12%, shipments increased by 3% and demand went up by about 1%.

Recovery should expand further in 2011 (see chart). For new orders, the outlook for 2011 is for growth in the range of 11% to 12%. Shipments are forecasted to grow another 10% to 11%, and domestic demand will mirror shipments. Exports will be stronger than imports in 2011, as they were in 2010.

Industrial production increased significantly in the first half of 2010, even though factory operating rates (utilization) remained very low by historical comparison. The demand that was created as the economy shifted from recession into recovery mode (filling supply chain pipelines, re-establishing inventories and responding to pent-up demand) was the principal impetus for improvement in the first two quarters for manufacturing, warehousing and distribution.

Forecasts are now calling for a combination of reduced GDP, corporate profit, business investment and output growth, with utilization remaining below 75% until late 2011. This is largely due to uncertainty. Consumers, investors and business owners need greater confidence in the economy’s ability to sustain positive growth.

Material Handling Equipment Distributors Association
Meet the Author
John Nofsinger is CEO of Material Handling Industry of America, located in Charlotte, North Carolina, and on the Web at www.mhia.org.

 

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