The MHEDA Journal - First Quarter, 2014 - (Page 44)
Uncertainty Clouds 2014 Forecast-
But Optimism Prevails
BY MARY LOU JAY
ost suppliers reported moderate to good growth
during 2013 and a few had exceptional years.
But uncertainty about the economy, the federal
government and the healthcare law has made it
more difficult to predict results for 2014. The consensus is that
the economy will remain relatively flat and the material handling
industry as a whole will have only modest growth (if any). But
companies have varying expectations about their own sales.
Some anticipate their performance will reflect that of the industry.
Others are predicting increases of 10 to 200 percent and more.
With the GDP's growth anemic,
suppliers worry about the impact
of rising interest rates, which could
climb quickly if the Fed tapers off its
purchase of U.S. government bonds.
If rates rise, they expect to see a corresponding drop-off in orders as companies rethink their capital budgets.
Most believe there will be negative repercussions for business if
Washington fails to get the U.S. budget
and spending under control and if there
is legislative standoff or government
shutdown. Even with record amounts
of cash available to them, potential
purchasers of equipment are sitting
on the sidelines unwilling to commit
to spending until they know what to
expect in terms of legislation and taxes.
The biggest worries appear to be
centered around the healthcare law.
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Some suppliers reported that customers are postponing projects and expansion plans until they have a clearer
picture of the costs of complying with
the law. But automation suppliers see
possible business opportunities; companies reluctant to hire new employees
because of healthcare costs will need to
rely more on automation for increased
Other concerns identified by suppliers include the impact of increased
trucking costs due to the Tier IV diesel emission standards and limited
hours of service; more punitive (vs.
cooperative) enforcement by OSHA
and increasing paperwork burdens
imposed by government agencies;
and a proliferation of required permits and inspections by cities and
Most suppliers plan to do more hiring in 2014, with engineering staff in
particular demand. Only a few companies mentioned plans to expand facilities; most, like their customers, are
finding ways to make more efficient
use of their existing space. Greater
efficiency could help them deliver
products faster, which is one of the
biggest demands made by customers
in recent years.
To reach those customers, more companies appear to be at least dabbling in
social media, and many are embracing
it wholeheartedly and hiring experts to
help them get the best results. Others
don't believe the required investment
in time and staff yields enough payoff
in the B-to-B market. The companies
with the most success in social media
see it as one more path to get information to their customers, especially to
younger members of the profession
who are comfortable with this type of
communication. While it may not pay
off directly in 2014, they believe in the
coming years it will be an important
tool in creating brand awareness and
3D Storage Systems Ltd.
(Newmarket, Ontario, Canada) U.S.
business development manager Neil
Dixon isn't making a firm prediction for
2014, but expects the company's more
aggressive marketing efforts will pay
off. "Like everyone, we're optimistic
and hope that sales will go up," he
said. 3D Storage Systems recently purchased a robot to increase its manufacturing efficiency and quality, and may
be adding more robotics in 2014. The
Table of Contents for the Digital Edition of The MHEDA Journal - First Quarter, 2014
From the Desk of Liz Richards
MHEDA’s 2014 Board of Directors and MBOA
Ask Your Board
MHEDA Member Profile
Material Handling Forecast
Industrial Trucks Forecast
MHEDA: 60 Years of Moving Members Forward
Don Chance Retires From NMHG
The New and Improved 2014 MHEDA Disc Report
Spotlight on Association News
MHEDA University Calendar
Index of Advertisers by Product Category
The MHEDA Journal - First Quarter, 2014