Material Handling Equipment and Systems Demand to Reach $20.4 Billion by 2008

Improving capital investment climate and expanding economic activity are helping to drive the U.S. market for material-handling equipment and systems by 2008 to $20.4 billion, reports a new study, Material Handling Equipment & Systems, from the Freedonia Group Inc., a Cleveland-based market research firm.

The report projects the material-handling market to increase 4.3% per year through 2008. Demand will be generated by technological innovations resulting in improved productivity and efficiency, increased safety and greater ease of operations, especially in such advanced segments of the business as material-handling robots, automatedguided vehicles (AGVs) and highend services, says the study's author, Tonia Ferrell, an industry analyst at the Freedonia Group.

The Freedonia Group's study resonates with recent reports from material-handling trade associations. The AGVS Product Section of the Material Handling Industry of America (MHIA), Charlotte, N.C., says there is an increase in the volume of new and expansion systems business for the first half of 2004 as reported by member companies from 47 systems in the first half of 2003 compared to 72 systems in the first half of 2004.

Dick Ward, MHIA's AGVS product section managing executive, says, "It is clear that based on these numbers manufacturers of automation solutions, namely AGVs, are seeing a substantial interest in this technology." Ward attributes the increased use of AGVs to greater acceptance of the technology and "the fact that the technology associated with these systems has matured significantly, and as a result have become far more cost-effective."

Through 2008, reports The Freedonia Group's study, the advanced/automated segment will see healthy increases, outpacing conventional equipment with 4.8% annual gains. Automated storage and retrieval systems will remain the largest advanced/automated category. Along with a continuation in the upswing in economic activity, automated storage and retrieval system demand will be bolstered by the development of new generations of products offering improved performance. Several smaller product segments — such as material handling robots and software — will see the most dynamic growth.

Demand for conventional material handling equipment — industrial trucks and lifts, conveying equipment, and hoists, cranes and monorails — will reach $14.4 billion in 2008. Conventional equipment will continue to account for the majority of material-handling systems demand, despite increasing automation in manufacturing and other markets. Industrial trucks and lifts will remain the largest category of conventional material-handling equipment and will see the fastest gains among the primary conventional segments.

Durable goods manufacturing represented 35% of total material-handling equipment demand in 2003. Growth over the forecast period will be above the industry average. Gains in durable goods markets will benefit from the increasing use of advanced/automated material handling equipment to enhance worker safety, as well as increase productivity and efficiency, particularly as U.S. manufacturers continue to face competition from low-cost countries. Nondurable goods manufacturing will also see above-average advances through 2008, led by healthy growth in the chemicals and food and beverages markets.

The 298-page study, Material Handling Equipment & Systems, is available from The Freedonia Group, www.freedoniagroup.com