Navigating the U.S. economy has been a bumpy ride of late for industry and consumers alike. There is hope for a smoother future, particularly in material handling, but the road to success may lead outside America’s borders.
World market demand for material handling equipment and systems is expected to increase 5% per year through 2012, according to a new study, World Material Handling Products, by The Freedonia Group, Inc. The Cleveland-based industry research firm expects major market gains to come from growth in fast-developing countries in the Asia/Pacific region, Eastern Europe, Africa/Mideast region and Latin America. Growth in these markets is expected to eventually outstrip sales in the U.S., Western Europe and Japan. However, in the near term, the study predicts “renewed strength” in the Japanese material handling market and “acceleration” in the U.S. market driven primarily by automated products such as robots and automatic guided vehicle systems (AGV).
The Fredonia Group report analyzed the $93.8 billion world material handling industry in 37 major national markets worldwide, predicting global industry growth to $133.5 billion, including price increases, by 2015. Rapid economic growth, increased manufacturing output, greater fixed investment activity and rising motor vehicle production in China, India, Turkey, Mexico and Russia, particularly, will lead demand and sales gains. China, a major producer and exporter to Asian markets, is predicted to account for 30% of total material handling sales growth.
The material handling products demanded by these developing markets will come primarily from U.S., Europe and Japan which are home to the largest and most advanced material handling equipment and systems producers. High-value products, technical expertise, advanced production systems, capital availability and trained labor will give western material handling firms a pronounced sales edge in developing markets. However, that edge may be short-lived. China, with its vast low-cost labor pool, has become a major producer and supplier to Asian markets. While quality and safety issues haunt Chinese-produced products, the country has shown amazing adaptability in other product markets and could become a major world material handling competitor within the next decade.
Next time: Which material handling products will see the greatest growth?