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Despite a record level of material handling new orders in 2016, MHI it predicting that a contraction overall in Material Handling Equipment Manufacturing (MHEM) is likely in 2017. For 2017, we see downside risks that could lead to a contraction with subsequent improvements in 2018 and 2019. The downside risks are the recent slowing in domestic manufacturing, the slowdown in oil and gas, the relatively strong dollar, slowing global growth, Brexit, and volatility in U.S. equity markets. As a result, material handling and the entire U.S. economy could be in for a downturn between now and the end of 2017. As most of you reading this article know, the material handling industry touches everything and if you are focused on ecommerce and automation you are thinking “what downturn?” On the other hand, if you service the oil and gas industry or heavy manufacturing, there is a significant downturn happening already. Although we expect weakness in 2017, MHEM forecasts for 2018 and 2019 indicate those are likely to be years of improvement for the material handling industry. New Orders are likely to rise for 2016 (by +2.6 percent) to a record level of $34.6 billion. Shipments are expected to rise in 2016 (by +7.4 percent) to a record $34.3 billion, but they are expected to fall sharply in 2017 (by -9.7 percent). Recovery is expected to begin in 2018 and carry through into 2019. Domestic Demand is expected to rise in 2016 (by +8.8 percent) to a new record of $36.4 billion, but it is expected to fall in 2017 (by -8.8 percent) to $33.2 billion. Although we are predicting a contraction in this area in 2017, it is significant to keep in mind that it will bring us back to 2015 levels, which were a record for our industry. […]
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