Industry outlookBouncing offthe bottomExperts agree: The materials handlingindustry may bump along the bottoma little longer, but optimism isslowly replacing pessimism.By Lorie King Rogers, Associate Editor34 M O N T H 2 0 0 6 / MODERN MATERIALS HANDLING mmh.com
SPECIAL REPORTILLUSTRATION BY DANIEL GUIDERAAcross the industry, across the country and across the globe, it was unanimous: Every segmentof the materials handling industry took a hit in 2009. Experts predicted a contraction last year,but underestimated the breadth of the economic decline.That was then, and this is now. Once again, industry experts are in agreement: The worst isbehind us and the signs are pointing to a better <strong>2010</strong> and beyond.“We can clearly say, that we have seen the turn from thematerials handling industry being in free fall to it starting tofeel as if there is a floor under us again,” says John Nofsinger,CEO of the Material <strong>Handling</strong> Industry of America (MHIA,704-676-1190, www.mhia.org), the trade organization thatHow is the present state of the economyaffecting your spending on materialshandling equipment technologies servicesand solutions?We are taking a "wait-and-see" approach/ moving slowly with our decisions48%We are holding off on investing21%We are proceeding with our investments18%The economy is having little/no impact on our materials handling spending13%<strong>Modern</strong> <strong>Materials</strong> <strong>Handling</strong>’s <strong>2010</strong> State of the Industry Studyrepresents the industry. “We started to see hints of a recoveryin the second quarter of 2009, and we’re now seeing renewedoptimism.”MHIA’s optimism is backed up by recent economic data.The Gross Domestic Product increased by 2.7% in the threequarters through winter <strong>2010</strong> and will keep growing at abouta 2.5% to 3.0% annual pace through 2011, according to JimHaughey, chief economist with Reed Business Information’sConstruction Data Group. Much of that growth is being drivenby a surge in equipment exports and an expansion of manufacturingproduction, which increased by nearly 6% in thesix months through January <strong>2010</strong> and willincrease 9% more by the end of 2011.Still, while the industry is gentlybouncing off the bottom, this is a subparrecovery after a deep recession, Haugheycautions.<strong>Modern</strong>’s Survey says…<strong>Modern</strong>’s Readers share Haughey’s cautiousoptimism, according to our recent<strong>2010</strong> State of the Industry study conductedfor <strong>Modern</strong> <strong>Materials</strong> <strong>Handling</strong> byHow does your company'sspending on materialshandling solutions in <strong>2010</strong>compare with 2009?Increasing 16%Decreasing 17%Staying the sameas 2009 67%<strong>Modern</strong> <strong>Materials</strong> <strong>Handling</strong>’s<strong>2010</strong> State of the Industry Studythe research department of parent company Reed BusinessInformation. The annual survey, which was e-mailed to<strong>Modern</strong> readers in February and yielded 353 respondents,tracks market changes during the last year and aims to understandthe current state, trends and practices in manufacturing,warehousing and distribution.Last year was a mixed bag, according to our respondents.Spend levels on materials handling solutions for 67% of theresponding companies remained steady. The remaining wereevenly split: 16% say spending on materials handling equipmentincreased, while 17% say spending fell.The industry outlook for <strong>2010</strong> and beyond is encouraging.Nine out of 10 companies say that spending on materialshandling will either increase or remain the same during thenext year. Only 8% say spending will drop.Still, that optimism is tempered. While nearly 31% ofrespondents say they are moving forward with intendedplans, 48% say they are taking a wait-and-see approach.MHIA’s viewThe Material <strong>Handling</strong> Equipment Manufacturing (MHEM)forecast, conducted by MHIA, provides a solid foundation forpredicting the market outlook. What do those numbers say?Last year, MHEM numbers led MHIA to predict a relativelymodest contraction for the industry of 18% to 20%.The actual decline was closer to 37%.For <strong>2010</strong>, MHEM numbers are predicting a relativelypositive forecast, with growth in orders in the 6% to 8.5%range. “Material handling suppliers are starting with a smallerorder book going into <strong>2010</strong>, but order books will be up bythe end of the year,” Nofsinger says.Although shipments of materials handling products contractedby 34% in 2009, Nofsinger says the contraction isdone and shipments are expected togrow 1% to 2% this year. While the globaleconomy has yet to rebound from theeconomic downturn, exports of materialshandling equipment, which droppedfrom $5.8 billion to $3.7 billion in 2009,are expected to increase in <strong>2010</strong> to about$3.8 billion. Imports of materials handlingequipment are forecasted to see a similarslight uptick from $3.7 billion in 2009 to$3.8 billion this year.Still, shipments and exports have a waymmh.com MODERN MATERIALS HANDLING / A P R I L 2 0 1 0 35
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