Vertical Reach

Few companies escaped the path of the economic whirlwind last year, and manufacturers of lift trucks were no exception. Although trends are moving in the right direction now, it will take time for bruised business to bounce back.

That explains why “cautious optimism” is the phrase repeated by most lift truck industry leaders, who understand that “up” is relative, and the journey out of the abyss is going to take time.

Statistics from the Industrial Truck Association (ITA) are telling. “In 2009, the market was off almost 40% from 2008 and 55% down from its peak in 2006,” says Jeff Rufener, president of ITA and vice president of marketing at Mitsubishi Caterpillar Forklift America (MCFA). “Over time, the industry has sustained growth, but it’s been a wild ride.”

Rufener says the first quarter of 2010 was stronger than ITA expected. “We have seen the bottom, and we are recovering,” he notes, “although we are recovering from a very low level.” According to the most recent ITA quarterly survey, full-year 2010 numbers are expected to be 10% to 15% higher than 2009’s figures.

“The global nature of the slowing economy affected every aspect of our business,” says Jonathan Dawley, vice president of marketing at NACCO Materials Handling Group Inc. (NMHG), manufacturer of the Hyster and Yale lift truck brands. “No lift truck manufacturer was spared impact as the customer base eliminated capital programs and sidelined large segments of their fleets.”

Chuck Pascarelli, president of sales and marketing for the Raymond Corp., agrees. “The lift truck market in calendar year 2009 was the lowest that we’ve experienced since the early 1980s,” he says. However, “the market has been in an ‘up’ trend so far this year. Rental utilizations and parts sales are increasing, which are always good precursors to an increase in truck sales; we remain cautiously optimistic.”

Brett Wood, president of Toyota Material Handling USA Inc. (TMHU), uses the same language when presenting his outlook. “We have cautious optimism for the remainder of the year,” he says. “The current market conditions are more optimistic, as the market is up approximately 30% compared to the same period in 2009 (January through April). Customer quote activity is strong, and pent-up demand has contributed to these favorable results in the first part of 2010.”

NMHG, too, is “cautiously optimistic that global market levels for units and parts volumes will improve at a moderate pace,” says Al Rankin Jr., chairman, president and CEO of parent company NACCO Industries Inc. “However, NMHG is not anticipating a market upturn of significance compared with the levels for the most recent six months, until the second half of 2010, with the exception of China and Brazil.” In North America, Rankin expects “moderate growth over the next three quarters.”

Exceeding Expectations

Caution aside, lift truck manufacturers continue to revise their 2010 predictions upward. While the latest material handling equipment manufacturing forecast released by the Material Handling Industry of America (MHIA) places growth in new orders at 6% to 9.5%, lift truck manufacturers are topping that.

“Although we won’t return to the peak levels of 2006 for some time, we are seeing growth that could top MHIA’s expectations,” Wood explains. “It’s been an encouraging first quarter.”

Raymond’s Pascarelli echoes that sentiment. “Our original projections were for modest growth similar to what MHIA forecasted,” he says, “but we are now seeing more robust trends and have increased our growth projections for the lift truck market to approximately 20%.”

Jim Moran, senior vice president at Crown Equipment, also says demand has been better than anticipated. “The market demand for the first four months of the year is tracking ahead of where many of us thought it would be,” Moran says. “We forecasted an 8% to 10% increase in demand compared to the same time period last year. We’re seeing demand track 44% ahead of last year in the electric forklift market and at an even higher growth pace for IC [internal combustion] forklifts.”