Material Handling Equipment Manufacturing Forecast to Recover in Early 2011

A Manufacturers Alliance (MAPI) forecast is predicting some light at the end of the recession tunnel beginning later this year in some industry segments and most by 2010 to early 2011. The Alliance says that total manufacturing production will fall 9 percent in 2009 and grow 3 percent in 2010. High tech industries are not predicted to outperform the general manufacturing sector. Computer and electric products production is predicted to decline 10 percent in 2009 and post 6 percent growth in 2010.

Material Handling Industry of America's (MHIA) Material Handling Equipment Manufacturing (MHEM) quarterly forecast serves as a good proxy for the equipment based market in the material handling industry. Material Handling Equipment Manufacturing includes elevators and moving stairways; conveyors and conveying equipment; overhead traveling cranes, hoists, and monorail systems; and industrial trucks, tractors, mobile straddle carriers, and stacker machinery.

Dan Meckstroth, chief economist at MAPI, says significant improvement in economic results will be broad-based beginning later this year. “Our forecast does foresee an eventual end to the current recession in late 2009. Another round of federal fiscal stimulus that includes more rebate checks, growing pent-up demand as spending is postponed, lower commodity prices, low interest rates from Federal Reserve monetary stimulus, and declining imports will all contribute to a rebound in industrial production activity in late 2009 to early 2010.”

According to MHIA's MHEM March 2009 forecast, based on data collected and reported monthly by the U.S. Bureau of Census according to the North American Industry Classification System (NAICS):

• MHEM new orders declined 1.3 percent in 2008. New orders are forecast to decline in the range of 18–20.0 percent for 2009 and perhaps another 10 percent in 2010 with recovery to begin in early 2011.
• MHEM shipments expanded 5.8 percent in 2008. Shipments are forecast to contract about 23 percent in 2009 and 7.5 percent in 2010.
• MHEM domestic demand grew 3.6 percent in 2008. Domestic demand (shipments plus Imports less exports) will contract about 23 percent in 2009. After a period of significant expansion, exports are forecast to decline in 2009 and 2010 as demand in the global economy contracts.

The MHEM Forecast is available to MHIA Members at no charge and to nonmembers for a fee.