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MHIA Sees a Turnaround in Process for Material Handling and Logistics with Growth Predicted in Early 2011

Thursday, November 5, 2009

Reduced investment and historically low capacity utilization point to contraction through 2010 followed by a new expansion cycle in early 2011.

Material Handling Industry of America (MHIA) leaders discussed material handling and logistics market trends at the recent 2009 Annual Meetings in Amelia Island, Florida. Overall, the first half 2009 has seen a decline of 44.9% for orders of new equipment vs. 2008. MHIA forecasts this decline to slow slightly in the last half of 2009 and hold the total year decline to 35.0% to 38.0%. A decline of another 5.0 to 10.0% in 2010 is expected with growth to begin early in 2011.

“We are in the middle of a serious contraction this year, but the worst appears to be over,” said Hal Vandiver, MHIA executive vice president of business development. “MHIA is forecasting that 2010 will be 6.0% to 8.0% below 2009 for the industry, and it will be 2011 before we see the industry come back into growth.”

More specific information on several key material handling and logistics markets was also discussed including:

Package Handling Conveyors
The conveyor market declined by 30% for the 12 month period ending in July 2009. MHIA is expecting a total year decline in the conveyor market of 35-38% for 2009, and a further decline of 5-10% in 2010. A recovery of 10% to 12% is forecasted in 2011. Conveyor market growth opportunities are seen in retail & general merchandise; grocery and food service; direct to consumer; pharmaceutical and medical supply; and in third party logistics.

Industrial Racks
U.S. domestic production of rack equipment is estimated to be $800 million in 2009, down 37.5% from 2008. “I am confident we have bottomed out,” said George Prest, Unarco Material Handling.

Casters & Wheels
Caster manufacturers saw a 25% drop in their market in 2009 and a bottoming out in 2010 followed by slow growth for several years. Growth opportunities are seen in the alternative energy and medical markets.

The first half of 2009 saw a record low for automation. Second half of 2009 is showing signs of improvement. We see 2010 as a year of recovery and growth (when compared to 2009, but below 2008 levels). Growth opportunities are seen in manufacturing, medical, food and beverage, government and sustainability.

The market for ergonomic systems and lifts was off 20% from the prior year period through the second quarter of 2009. “Technically, we have hit a bottom,” said Brian McNamara, Southworth International Group, Inc.

Supply Chain Software
Annual sales for warehouse management systems fell from $1.24 billion to $1.195 billion from 2007 to 2008. It is estimated that it has continued to contract in 2009. The market is forecasted to grow again in 2010.

Lift Trucks
In 2009, the U.S. lift truck market is estimated to drop approximately 35%, compared to 2008. 2009 is forecasted to be the bottom and recovery to begin gradually next year. Growth opportunities are seen in food and beverage, grocery chains and general merchandise stores.

Overhead Material Handling
In 2009, the industry is contracting in all segments (hoists, cranes and monorails). The outlook for 2010 is for our industry to begin a long, slow recovery; but, likely will not see positive growth until late in the year. Growth opportunities are seen in renewable energy, infrastructure, government/military and aerospace.

Download the complete report.

MHIA is an international trade association that has represented the material handling and logistics industry since 1945. MHIA members include material handling and logistics equipment and systems manufacturers, integrators, consultants, publishers, and third party logistics providers. Member companies come from all areas of material handling and various parts of the world, making MHIA a strong national and international representative for the material handling and logistics industry. Much of the work of the industry is done within its product-specific Industry Groups. The association sponsors trade events, such as ProMat 2011 and NA 2010 to showcase the products and services of its member companies and to educate manufacturing, distribution and supply chain professionals on the productivity solutions provided through material handling and logistics. MHIA also publishes a quarterly Material Handling Equipment Manufacturing Forecast.

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