Industry Research
Please Note: The chart above categorizes industry segments, i.e. containers, decking, by their estimated minimum value in sales or revenue. For example the containers category achieves in excess of $20 billion in sales annually while decking generates in excess of $10 million. So when looking at this chart you should multiply the value category by the number of industry segments in that value category to understand the $125 Billion material handling market.
The annual consumption of material handling equipment systems in the United States has grown to over 125 billion per year, as of 2005. This consumption takes place in virtually all discrete process and service industry sectors with the vast majority being found throughout Construction (SICs 15-17), Manufacturing (SICs 20-39) and Service (SICs 40-59). For further market analysis of material handling consumption, click here.Geographic Consumption Patterns
Material Handling Industry created an analysis program known as MHITAP" (Material Handling Industry Territory Analysis Program). Included in the program are a series of unique models that predict the consumption (diffusion) of material handling equipment and systems. Two MHITAP" models were applied to the consumption model above to construct the two diffusion maps below. One for equipment and a second for integrated systems. Both maps show percentage of total consumption by geographic region.
Source: MHITAP" Database-General Material Handling Industry Model (for equipment) and Custom Model (for systems).
The overall material handling industry business cycle behaves somewhat predictably when looked at on a rate-of-change basis. While amplitude (growth or decline) will change, the period between highs and lows has proven repeatable. It should be noted that different segments or equipment groups within the industry will lead or lag this overall industry chart - generally as a function of differing order to installation lead times.
As shown in the graph, more moderate shipment growth is expected through 2006 and into 2007.
Projections Beyond 2006-2007In 2006, the business cycle for the industry as a whole will be in a period of growth that should extend well into 2006 and begin a period of slower growth into 2007.
Many forces will be at work to keep material handling and logistics on a healthy economic path including:
Continued shift toward applying equipment versus new plant capital spending.
Consumer demand for variety, availability, convenience, quality, and affordability.
Material handling and logistics being seen as a strategic versus tactical activity.
Globalization and consolidation of American companies.
Concurrence with which goods and information are moved along supply channels.
Mass customization and electronic commerce.
Shifts to outsourcing.
Continued pressure to reduce inventories.
Material handling and logistics has assumed a very strategic role in the improvement of order-to-delivery cycles, inventory reduction and satisfying changing buying culture and behavior. As a result, we expect exceptional opportunities through the decade for the industry both domestically and internationally.
