The MHEDA Journal - First Quarter, 2014 - (Page 44)

INDuSTRy sUPPLiErs FORECAST Uncertainty Clouds 2014 Forecast- But Optimism Prevails M 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. 44 MHEDA | 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 efficiencies. 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 other jurisdictions. 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 building relationships. 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

President’s Perspective
From the Desk of Liz Richards
Editor’s Note
MHEDA’s 2014 Board of Directors and MBOA
Ask Your Board
MHEDA Member Profile
At Work
Distributor Forecast
Supplier Forecast
Manufacturer Forecast
Material Handling Forecast
Conveyor Forecast
Industrial Trucks Forecast
MHEDA: 60 Years of Moving Members Forward
Don Chance Retires From NMHG
Convention Preview
The New and Improved 2014 MHEDA Disc Report
New Members
Spotlight on Association News
MHEDA University Calendar
MHEDA Milestones
Index of Advertisers by Product Category

The MHEDA Journal - First Quarter, 2014