MHIA releases 2007 forecast, outlines key issues

By Plant Engineering Staff March 16, 2007

The latest Material Handling Equipment Manufacturing (MHEM) forecast was released at the Material Handling Industry of America ’s Roundtable of Industry Leaders, held in February in Naples, FL. In addition to releasing the forecast, the roundtable outlined a number of issues facing the material handling and logistics industry.

An overview of the market in 2006 showed new orders growing 10% over 2005, setting a record high for the series at $26.3 billion. Shipments grew 13.7% in 2006, the report said. Unfilled orders grew 14.4% in 2006 versus 2005 to finish at $8.5 billion.

Also according to the report, imports increased 11.9% in 2006 over 2005, while exports grew 21.4%. The net trade value (imports minus exports) was $1.4 billion, representing an 8.0% decline in the trade gap from 2005 from 2006. Total US consumption for 2006 finished at $27.1 billion, growing 12.4% over 2005.

Looking ahead to 2007, the MHEM forecast is favorable, with an expected “soft landing” in 2008. The MHIA forecasts continued growth in new orders and shipments in 2007, followed by slower growth or perhaps a mild contraction in both areas in 2008. Consumption is expected to grow about 6.5 to 9.5% in 2007, followed by modest to no growth in 2008.

The MHEM Forecast is a quarterly forecast of the $125 billion total U.S. Material Handling & Logistics market using the $27.1 billion material handling equipment market as a proxy.

Additionally, the roundtable identified several key issues facing the material handling & logistics industry in 2007:

The increased expansion and sophistication of distribution centers to handle rising imports, coupled with a struggling U.S. manufacturing sector, means that U.S. service sectors will dominate over the next decade, not U.S. manufacturing

The increase in Internet orders and fulfillment coupled with increased imports creates the need for improved reverse logistics, especially on goods from emerging markets

Energy costs and alternate energy sources will be critical for manufacturers and the supply chain

The overall state of manufacturing in the U.S. and the continued pressure on U.S. infrastructure due to increased imports from China and other emerging markets will continue

Significant demographic shifts in provider and end-user markets are expected due to current and impending baby boomer retirement

Offshore transportation and tariff costs plus infrastructure concerns overseas will represent an opportunity for U.S. manufacturing to re-gain competitiveness

A continued shift from full to broken and mixed-case order picking

Emphasis on automation to overcome looming worker shortages.