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MHI Predicts Double-Digit Growth

By George Prest, CEO, MHI 

The material handling industry has seen solid recovery since the recession and that growth should continue into 2014. Using MHI’s Material Handling Equipment Manufacturing (MHEM) forecast as a proxy, material handling equipment orders are forecasted to grow 7 percent in 2013 and 11 percent or more in 2014.

Risks certainly remain, but they are not new. We expect these fundamentals to favorably support MHEM expansion through 2013 and 2014, setting the stage for continued expansion in 2015.

The recovery is gaining momentum, which can be seen in the manufacturing and supply chain industries. Material handling equipment and systems purchases derive from the need for enterprises to anticipate and match changes in demand to yield improvements in efficiency, throughput and visibility. Businesses are well-positioned to make these investments. Firms have low debt, are profitable and have relatively high utilization rates.

Material handling equipment shipments are forecasted to grow 5 percent in 2013 and 10.8 percent in 2014. Domestic demand (shipments plus imports less exports) are estimated to grow 5.2 percent in 2013 and just more than 11 percent in 2014.

MHEM trade growth slowed by more than 50 percent in 2012, reflecting reduced U.S. demand and serious problems in foreign markets. Import growth in 2012 was 17.9 percent, down from 37.7 percent in 2011. Export growth was 11.2 percent in 2012, down from 26.2 percent in 2011. MHEM imports and exports are expected to slow dramatically in 2013 and rebound modestly beginning mid-2014.

Positive signs ahead include:

• Leading indicators are pointing up

• Employment is rising

• Retail sales are rising

• Construction is improving

• Less foreign energy dependence

However, there are concerns for 2014:

• Uncertainty created by Washington, DC

• Stagnant wage growth

• Ongoing high unemployment

• Supply chain workforce shortage

• The impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on small business when it comes into effect in January

• Higher payroll and Affordable Care Act taxes

Trade Events are Positive Indicators

MODEX 2014 will be presented in Atlanta from March 17-20 at the Georgia World Congress Center. This expo has seen positive growth and will showcase an expanded show floor of 250,000 square feet. We are also seeing great interest in our exhibit space selection for ProMat in 2015. Such activity signals not only confidence in the economy and our industry, but also the value MHI brings to our members and the end user community.



George Prest is CEO of MHI, located in Charlotte, North Carolina, and on the web at www.mhi.org