The MHEDA Journal - First Quarter, 2013 - (Page 63)
OVERALL MATERIAL HANDLING
New Orders and Shipments
Slow Growth Expected in 2013
he material handling industry has rebounded steadily in the years following the recession of 2008 and 2009. Following a trough in third quarter 2009, new orders increased 20.1 percent in 2010, 24.2 percent in 2011, and are expected to grow 8-9 percent in 2012, according to the latest Material Handling Equipment Manufacturing (MHEM) forecast.
In addition to new orders, material handling equipment shipments are forecasted to have grown 9 percent in 2012, with 7.5 percent growth projected in 2013 and 2014. Domestic demand (shipments plus imports less exports) will likely mirror shipment growth in 2012, 2013 and 2014. All of this data has led Material Handling Equipment Manufacturing to shift from “accelerating growth” to the “decelerating growth” phase. The industry may continue to vacillate between these phases over the next nine to 15 months, as in prior expansion cycles.
2013 projects to continue this trend, albeit with some downside risk. The outlook for new order growth is for a growth of 6 percent in 2013 going into 2014. Our growth forecast through 2014 continues to anticipate sluggish performance in the major elements of the U.S. and world economies. Slow macro growth worldwide holds downside risk for MHEM prospects, as illustrated in the chart below. “Consumers’ and investors’ confidence is best characterized as uncertain; unemployment, industrial production activity and factory operating rates (utilization) are improving modestly,” says Hal Vandiver, MHIA executive consultant. “All are favorably impacting MHEM, but do not indicate robust growth. Residential and non-residential construction, if forecasts hold, will contribute greatly to positive growth 2014 and beyond. We have extended the forecast of 2012 to 2013; and in 2014, indicate the expectation for slower growth.”
While the recovery has weak momentum, it has not ground to a halt. We expect growth of about 1.5 percent in the second half of 2012. A deeper Eurozone recession and a harder landing in China remain the principal downside risks. However, news of proposed European Central Bank support for sovereign debt has led us to reduce our U.S. recession risk to 20 percent from 25 percent. While we forecast overall growth in 2013, these mitigating factors could tamper that. To stay current with market trends, we look at leading indicators - key economic variables that economists use to predict a new phase of the business cycle. Several economic time series tend to anticipate the cyclicality of the Material Handling Equipment Manufacturing time series. These indicators lead MHEM by 12 to 21 months. They are: PMI Index (12 months), FRB Industrial Production Index and the companion series Capacity Utilization (9-12 months) and the Index of Consumer Sentiment (12 months). Some 12 to 21 months after these series “peak” or “trough” in their cycle, MHEM will very likely do the same. MHEDA members should keep up with these key indicators when planning for next year and going forward. Good luck!
The MHEDA Journal | First Quar ter 2 013
MHEM Forecast 2012 – 2014 vs. GDP
Our growth forecast through 2014 continues to anticipate sluggish performance in the major elements of the US and World economies. Slow macro growth worldwide holds downside risk for MHEM prospects.
Annual Rate of Change
8.0% 6.0% 4.0% 2.0%
GDP Four Quarter Percent Change
20.0% 10.0% 0.0% -10.0% -20.0% -30.0%
2001 1997 1998 1999 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012f 2013f 2014f 2015f
GDP has been offset to indicate a two quarter lead of MHEM.
Indicates area of downside risk to forecast.
New Orders Shipments
New Orders Forecast Shipments Forecast
Sources: USDOC, Global Insight, MHIA
GDP Nominal +2Q Global Insight Forecast
F. Hal Vandiver October 2012
Table of Contents for the Digital Edition of The MHEDA Journal - First Quarter, 2013
From the Desk of Liz Richards
MHEDA’S 2013 BOARD OF DIRECTORS AND MBOA
Ask Your Board
MHEDA Member Profile
2013 Industry Forecast
MHEDA Members Exhibit at ProMat
MHIA Expects Slow Growth in 2013
Modest Growth for Industrial Trucks Sector
Cautious Optimism in Conveyor Industry
EBITA or ROA?
Get Your Game On
Spotlight on Association News
MHEDA University Calendar
Index of Advertisers by Product Category
The MHEDA Journal - First Quarter, 2013