Material handling sector begins long road to recovery

As the U.S. economy begins to pick up, so will orders for material handling equipment, according to the Material Handling Industry of America (MHIA). The group's latest Material Handling Equipment Manufacturing Forecast (MHEM) shows orders growing 6.0 to 8.5 percent in 2010.

That's not nearly enough to offset the 37.4-percent reduction in orders in 2009, but it's encouraging nonetheless. "Industrial production activity is increasing, even though factory operating rates remain very low by historical comparison," said Hal Vandiver, MHIA executive vice president of business development, in a statement. Demand created as the economy shifts to filling supply chain pipelines, re-establishing inventories, and responding to pent-up demand will be the principal impetus for improvement over the next few quarters in manufacturing, warehousing, and distribution, he said.

What growth occurs this year will be incremental. Shipments of material handling equipment, which contracted 34.4 percent in 2009, are expected to grow 1.0 to 2.0 percent in 2010. Domestic demand (shipments plus imports less exports) contracted 34.7 percent in 2009 and will increase 1.0 to 2.0 percent in 2010. Exports and imports will improve in 2010 at about the same rate.

The quarterly MHEM forecast of material handling equipment manufacturing looks 12 to 18 months out. A copy of the full report is available for download at www.mhia.org/learning.