US forecasts improve for 2012 as American economy gains strength

25 January 2012

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Vandiver produces the MHEM Forecast for the MHIA Business Planning Community each quarter to report on the state of the US materials handling industry.

After sounding a cautious note in the August, 2011, report citing investor skepticism and slow industrial capacity improvement, Vandiver noted that confidence had returned in 2011, owing to increased industrial utilization and employment, aided by a rebound in the housing market.

MHEM’s new orders growth remained stable, if a fraction lower, at 15.2% in 2011. Shipments however grew an estimated 17.1%, from 6.1% in 2010. The report forecasts MHEM shipment growth to slow in 2012 to 9.0% before rising to 11.0% in 2013. Continued growth is forecasted for 2014.

MHEM reflects upon the industry using the Manufacturers’ Alliance (MAPI) business cycle model, showing the cycle of acceleration or deceleration of industries such as Oil & Gas, Mining, Housing, and Chemicals.

The December MAPI model shows the materials handling sector in a decelerating growth phase, though it is decelerating more slowly than MAPI showed last September.

The Institute for Supply Management’s Purchasing Managers’ Index generally leads MHEM demand by a year. This index reveals a growth in purchasing managers thinking about becoming more active with future purchasing between June and December of 2012.

US Department of Commerce/Federal Reserve Board’s measure of industrial capacity ultilization is traditionally seen to lead demand by nine months. After growing beginning in mid 2011, utilization is predicted to continue growing through to 2013, nearly, but not quite, reaching its pre-recession rate.

After sinking to a low of under 65% in post-recession 2009, utilization rates have risen to almost 75.0% in the second quarter of 2011, a year earlier than previously anticipated. Utilization is expected to reach 80.0% in 2013.