MHI Solutions - Volume 6, Issue 2 - 141

ECONOMIC MARKET ANALYSIS

Outlook Is Strong for Material
Handling Industry in 2018
BY JASON SCHENKER, CMT®, CFP®, ERP®, CVA®, PRESTIGE ECONOMICS

T

he outlook for the U.S. economy,
global economy and material
handling is strong for 2018.
Leading economic activity data, low
interest rates, favorable tax policies in
the United States, a falling greenback,
and solid equity markets were all positive dynamics coming together to push
material handling orders and overall
activity to strong levels at the start of
2018. And a mix of these factors continue to provide reasons to be optimistic about growth overall throughout
the year.
Economic data
Global growth and purchasing
manager index (PMI) data are supportive of material handling activity
The U.S. ISM Manufacturing Index, the
Eurozone Manufacturing PMI, and the
Chinese Caixin Manufacturing PMI all

conveyed growth at the end of 2017, with
the Eurozone Manufacturing PMI at a
record all-time high in December 2017,
very strong expansion in the U.S. ISM,
and continued growth in the Chinese
Caixin. These leading indicators provided strong tailwinds for growth going
into the start of the year.
In January, the International
Monetary Fund (IMF) also raised its
forecasts of global growth for 2018 and
2019 from 3.7 percent to 3.9 percent. This
is a very strong economic growth rate.
In January, the International
Monetary Fund (IMF) also raised its
forecasts of global growth for 2018 and
2019 from 3.7 percent to 3.9 percent. This
is a very strong economic growth rate.
In addition to PMIs and IMF
global growth expectations, the New
Orders series for the MHI Business
Activity Index (BAI) also showed two

January 2018 IMF Growth Forecasts Show Expected Global Growth Accelerations

IMF Growth Forecasts
- January 2018 -
Annual Forecasts
Real GDP, Year-over-Year % Change
Global
Eurozone
U.S.
Japan
U.K.
Canada
Mexico
Brazil
Russia
India
China

2017
3.2
1.8
1.5
0.9
1.9
1.5
2.9
-3.5
-0.2
7.1
6.7

PRESTIGE ECONOMICS

2017
3.7
2.4
2.3
1.8
1.7
3.0
2.0
1.1
1.8
6.7
6.8

2018
3.9
2.2
2.7
1.2
1.5
2.3
2.3
1.9
1.7
7.4
6.6

2019
3.9
2.0
2.5
0.9
1.5
2.0
3.0
2.1
1.5
7.8
6.4

consecutive record high levels at the end
of 2017, when 71 percent of respondents
reported rising new orders. This very
industry-specific data series offers the
best glimpse into the health of material
handling and it also presented strong
tailwinds at the end of 2017 for the first
part of 2018. The most important data
to watch with forward-looking implications for material handling are global
PMIs and the MHI BAI.
Market dynamics
Financial markets are also supportive
of material handling activity. Material
handling is very much a procyclical
industry, and while some sectors like
e-commerce are likely to remain evergreen, the truth is that the entire material handling industry will be highly
dependent on the pace of overall U.S.
economic activity, as well as interest
rates, the dollar and equities. Relatively
low interest rates, a strong equity market, and weakened dollar are critical
factors that are likely to support material handling this year. These data are
not only important for overall material handling activity, but they are also
important for some of our forecasts of
MHI industry groups and sectors.
Downside risks
The biggest downside risks to the
outlook for material handling are twofold. And both of these risks are tied
to policy.
The first problem is that it's getting
tougher to find people. Companies
across material handling have reported
difficulty in finding the people they
need to accelerate growth in their companies. Positions are left unfilled, and
this is true right now across industries-
not just material handling. This is partially the result of a long expansionary
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MHI SOLUTIONS

141


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Table of Contents for the Digital Edition of MHI Solutions - Volume 6, Issue 2

CEO Update
3-Step Checklist for Addressing the Supply Chain Skills Gap
Beyond Analytics
Women Rising
People Are at the Center of the Robotics Revolution
Acing ‘The Basics’ of Business
Bridging the Skills Gap
Millennials and GenZ: The Key to Future-Proofing Your Supply Chain Workforce
Identifying Talent
Attracting and Retaining Top Supply Chain Talent
Consider Sustainability When Choosing Your Next Forklift Power System
CTE Program: Students, Instructors Benefit from Student Days Participation
Industry Focus: Intermodal
Education and Industry: An Ecosystem Mindset
2018 MHI Innovation Award Finalists
MODEX 2018
Economic Market Analysis
Safer Handling
Fulfillment Update
Product/Solutions Spotlight
Scholarship Winners: Where Are They Now?
Inside MHI
Will Big Data Help Us Predict the Future?
MHI News
Calendar
Index of Advertisers
MHI Solutions - Volume 6, Issue 2 - Intro
MHI Solutions - Volume 6, Issue 2 - cover1
MHI Solutions - Volume 6, Issue 2 - cover2
MHI Solutions - Volume 6, Issue 2 - 3
MHI Solutions - Volume 6, Issue 2 - 4
MHI Solutions - Volume 6, Issue 2 - 5
MHI Solutions - Volume 6, Issue 2 - 6
MHI Solutions - Volume 6, Issue 2 - 7
MHI Solutions - Volume 6, Issue 2 - 8
MHI Solutions - Volume 6, Issue 2 - CEO Update
MHI Solutions - Volume 6, Issue 2 - 3-Step Checklist for Addressing the Supply Chain Skills Gap
MHI Solutions - Volume 6, Issue 2 - 11
MHI Solutions - Volume 6, Issue 2 - 12
MHI Solutions - Volume 6, Issue 2 - 13
MHI Solutions - Volume 6, Issue 2 - 14
MHI Solutions - Volume 6, Issue 2 - 15
MHI Solutions - Volume 6, Issue 2 - 16
MHI Solutions - Volume 6, Issue 2 - 17
MHI Solutions - Volume 6, Issue 2 - Beyond Analytics
MHI Solutions - Volume 6, Issue 2 - 19
MHI Solutions - Volume 6, Issue 2 - 20
MHI Solutions - Volume 6, Issue 2 - 21
MHI Solutions - Volume 6, Issue 2 - 22
MHI Solutions - Volume 6, Issue 2 - 23
MHI Solutions - Volume 6, Issue 2 - Women Rising
MHI Solutions - Volume 6, Issue 2 - 25
MHI Solutions - Volume 6, Issue 2 - 26
MHI Solutions - Volume 6, Issue 2 - 27
MHI Solutions - Volume 6, Issue 2 - 28
MHI Solutions - Volume 6, Issue 2 - 29
MHI Solutions - Volume 6, Issue 2 - 30
MHI Solutions - Volume 6, Issue 2 - 31
MHI Solutions - Volume 6, Issue 2 - 32
MHI Solutions - Volume 6, Issue 2 - 33
MHI Solutions - Volume 6, Issue 2 - 34
MHI Solutions - Volume 6, Issue 2 - 35
MHI Solutions - Volume 6, Issue 2 - People Are at the Center of the Robotics Revolution
MHI Solutions - Volume 6, Issue 2 - 37
MHI Solutions - Volume 6, Issue 2 - 38
MHI Solutions - Volume 6, Issue 2 - 39
MHI Solutions - Volume 6, Issue 2 - 40
MHI Solutions - Volume 6, Issue 2 - 41
MHI Solutions - Volume 6, Issue 2 - Acing ‘The Basics’ of Business
MHI Solutions - Volume 6, Issue 2 - 43
MHI Solutions - Volume 6, Issue 2 - 44
MHI Solutions - Volume 6, Issue 2 - 45
MHI Solutions - Volume 6, Issue 2 - 46
MHI Solutions - Volume 6, Issue 2 - 47
MHI Solutions - Volume 6, Issue 2 - 48
MHI Solutions - Volume 6, Issue 2 - 49
MHI Solutions - Volume 6, Issue 2 - Bridging the Skills Gap
MHI Solutions - Volume 6, Issue 2 - 51
MHI Solutions - Volume 6, Issue 2 - 52
MHI Solutions - Volume 6, Issue 2 - 53
MHI Solutions - Volume 6, Issue 2 - 54
MHI Solutions - Volume 6, Issue 2 - 55
MHI Solutions - Volume 6, Issue 2 - Millennials and GenZ: The Key to Future-Proofing Your Supply Chain Workforce
MHI Solutions - Volume 6, Issue 2 - 57
MHI Solutions - Volume 6, Issue 2 - 58
MHI Solutions - Volume 6, Issue 2 - 59
MHI Solutions - Volume 6, Issue 2 - 60
MHI Solutions - Volume 6, Issue 2 - 61
MHI Solutions - Volume 6, Issue 2 - 62
MHI Solutions - Volume 6, Issue 2 - 63
MHI Solutions - Volume 6, Issue 2 - 64
MHI Solutions - Volume 6, Issue 2 - 65
MHI Solutions - Volume 6, Issue 2 - Identifying Talent
MHI Solutions - Volume 6, Issue 2 - 67
MHI Solutions - Volume 6, Issue 2 - 68
MHI Solutions - Volume 6, Issue 2 - 69
MHI Solutions - Volume 6, Issue 2 - 70
MHI Solutions - Volume 6, Issue 2 - 71
MHI Solutions - Volume 6, Issue 2 - Attracting and Retaining Top Supply Chain Talent
MHI Solutions - Volume 6, Issue 2 - 73
MHI Solutions - Volume 6, Issue 2 - 74
MHI Solutions - Volume 6, Issue 2 - 75
MHI Solutions - Volume 6, Issue 2 - 76
MHI Solutions - Volume 6, Issue 2 - 77
MHI Solutions - Volume 6, Issue 2 - 78
MHI Solutions - Volume 6, Issue 2 - 79
MHI Solutions - Volume 6, Issue 2 - Consider Sustainability When Choosing Your Next Forklift Power System
MHI Solutions - Volume 6, Issue 2 - 81
MHI Solutions - Volume 6, Issue 2 - 82
MHI Solutions - Volume 6, Issue 2 - 83
MHI Solutions - Volume 6, Issue 2 - 84
MHI Solutions - Volume 6, Issue 2 - 85
MHI Solutions - Volume 6, Issue 2 - CTE Program: Students, Instructors Benefit from Student Days Participation
MHI Solutions - Volume 6, Issue 2 - 87
MHI Solutions - Volume 6, Issue 2 - 88
MHI Solutions - Volume 6, Issue 2 - 89
MHI Solutions - Volume 6, Issue 2 - 90
MHI Solutions - Volume 6, Issue 2 - 91
MHI Solutions - Volume 6, Issue 2 - 92
MHI Solutions - Volume 6, Issue 2 - 93
MHI Solutions - Volume 6, Issue 2 - Industry Focus: Intermodal
MHI Solutions - Volume 6, Issue 2 - 95
MHI Solutions - Volume 6, Issue 2 - 96
MHI Solutions - Volume 6, Issue 2 - 97
MHI Solutions - Volume 6, Issue 2 - 98
MHI Solutions - Volume 6, Issue 2 - 99
MHI Solutions - Volume 6, Issue 2 - Education and Industry: An Ecosystem Mindset
MHI Solutions - Volume 6, Issue 2 - 101
MHI Solutions - Volume 6, Issue 2 - 102
MHI Solutions - Volume 6, Issue 2 - 103
MHI Solutions - Volume 6, Issue 2 - 104
MHI Solutions - Volume 6, Issue 2 - 105
MHI Solutions - Volume 6, Issue 2 - 106
MHI Solutions - Volume 6, Issue 2 - 2018 MHI Innovation Award Finalists
MHI Solutions - Volume 6, Issue 2 - 108
MHI Solutions - Volume 6, Issue 2 - 109
MHI Solutions - Volume 6, Issue 2 - 110
MHI Solutions - Volume 6, Issue 2 - 111
MHI Solutions - Volume 6, Issue 2 - 112
MHI Solutions - Volume 6, Issue 2 - 113
MHI Solutions - Volume 6, Issue 2 - 114
MHI Solutions - Volume 6, Issue 2 - 115
MHI Solutions - Volume 6, Issue 2 - 116
MHI Solutions - Volume 6, Issue 2 - 117
MHI Solutions - Volume 6, Issue 2 - 118
MHI Solutions - Volume 6, Issue 2 - 119
MHI Solutions - Volume 6, Issue 2 - 120
MHI Solutions - Volume 6, Issue 2 - 121
MHI Solutions - Volume 6, Issue 2 - 122
MHI Solutions - Volume 6, Issue 2 - 123
MHI Solutions - Volume 6, Issue 2 - 124
MHI Solutions - Volume 6, Issue 2 - MODEX 2018
MHI Solutions - Volume 6, Issue 2 - 126
MHI Solutions - Volume 6, Issue 2 - 127
MHI Solutions - Volume 6, Issue 2 - 128
MHI Solutions - Volume 6, Issue 2 - 129
MHI Solutions - Volume 6, Issue 2 - 130
MHI Solutions - Volume 6, Issue 2 - 131
MHI Solutions - Volume 6, Issue 2 - 132
MHI Solutions - Volume 6, Issue 2 - 133
MHI Solutions - Volume 6, Issue 2 - 134
MHI Solutions - Volume 6, Issue 2 - 135
MHI Solutions - Volume 6, Issue 2 - 136
MHI Solutions - Volume 6, Issue 2 - 137
MHI Solutions - Volume 6, Issue 2 - 138
MHI Solutions - Volume 6, Issue 2 - 139
MHI Solutions - Volume 6, Issue 2 - 140
MHI Solutions - Volume 6, Issue 2 - Economic Market Analysis
MHI Solutions - Volume 6, Issue 2 - 142
MHI Solutions - Volume 6, Issue 2 - Safer Handling
MHI Solutions - Volume 6, Issue 2 - 144
MHI Solutions - Volume 6, Issue 2 - 145
MHI Solutions - Volume 6, Issue 2 - Fulfillment Update
MHI Solutions - Volume 6, Issue 2 - 147
MHI Solutions - Volume 6, Issue 2 - 148
MHI Solutions - Volume 6, Issue 2 - Product/Solutions Spotlight
MHI Solutions - Volume 6, Issue 2 - 150
MHI Solutions - Volume 6, Issue 2 - Scholarship Winners: Where Are They Now?
MHI Solutions - Volume 6, Issue 2 - 152
MHI Solutions - Volume 6, Issue 2 - Inside MHI
MHI Solutions - Volume 6, Issue 2 - 154
MHI Solutions - Volume 6, Issue 2 - Will Big Data Help Us Predict the Future?
MHI Solutions - Volume 6, Issue 2 - 156
MHI Solutions - Volume 6, Issue 2 - MHI News
MHI Solutions - Volume 6, Issue 2 - 158
MHI Solutions - Volume 6, Issue 2 - 159
MHI Solutions - Volume 6, Issue 2 - Calendar
MHI Solutions - Volume 6, Issue 2 - Index of Advertisers
MHI Solutions - Volume 6, Issue 2 - 162
MHI Solutions - Volume 6, Issue 2 - cover3
MHI Solutions - Volume 6, Issue 2 - cover4
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