By George Prest, CEO, MHI
MHI expects economic fundamentals to favorably support expansion for material handling equipment in 2015. Using MHI’s Material Handling Equipment Manufacturing (MHEM) forecast as a proxy, material handling equipment orders are forecasted to grow 8-9 percent in 2014 and 2015.
Even though the stock market has been volatile, we are confident in the fundamentals in the U.S. for 2015.
Non-defense capital goods orders, a leading indicator for industrial, are positive, and the outlook on housing looks favorable. We are anticipating 2.8 percent GDP growth for 2015, better than the projected 2.1 percent growth in 2014.
For material handling and logistics manufacturers, continued moderate economic growth coupled with predicted job gains should be positive for equipment demand.
Lower gas prices and lower commodity prices, especially in energy, should boost consumer spending. When more people have jobs and more money in their pockets, they will be purchasing more goods. Businesses will make supply chain investments to meet this demand.
Material handling equipment shipments are forecasted to grow 4.5-5 percent in 2014 and 9-11 percent in 2015. Domestic demand (shipments plus imports less exports) are estimated to grow 4.5-6 percent in 2014 and more than 10-11 percent in 2015.
MHEM Imports are forecasted to grow 6.0% in 2014 and 9.0% in 2015. Exports are expected to rebound modestly beginning mid-2014 to grow 4.0% and continue to grow in 2015 around 6.0%.
While the signs are positive for moderate sustained growth, there are concerns for 2015:
• Uncertainty created by Washington, DC
• Rising operating expenses
• Higher interest rates
• Rising labor costs
• Supply chain workforce shortage
• Global economic instability
Trade Events are Positive Indicators
ProMat 2015 will be presented in Chicago from March 23-26 at McCormick Place. ProMat is the industry’s premier event and will showcase over 800 leading solution providers on the largest ever 320,000 square foot show floor. We are also anticipating a “sold out” MODEX in 2016.
Our industry is all about productivity and productivity is at the heart of a strong economy. All of this confirms that our industry is in a strong place right now and it looks to be the same for the next few years.