Australian operators will have to pay more for forklifts, as suppliers face drastically reduced sales as the economic downturn bites.

Activity in the warehouse appears to be slowing based on forklift sales figures. When recession fears really hit sales of fork trucks in Australia dropped by around a quarter in October, though rebounded slightly later in the year.

The Australian Sales Manager for Nichiyu Forklifts, Craig Coles, warns of tough times ahead.

"Given that the global financial crisis has yet to really bite, it is inevitable that capital equipment purchases will fall during 2009, but to what extent is anyone’s guess," he says.

The devaluation of the Australian dollar will also mean higher prices for local buyers, Coles says.

"Since the Aussie dollar has fallen from 98 US cents to the low 60s, importers are now paying up to 30 percent more for purchases in US dollars," he says.

"The situation is even worse for importers purchasing stock in Japanese Yen, which has dropped more than 40 percent from a high of 105 to a low of 55 in recent weeks."

But Coles believes the market will rebound – perhaps sooner than some think.

"My own feeling is that while the overall market may contract 15 to 20 percent, it will bounce back strongly once the current economic situation settles down," he says.

Despite recession fears, Nichiyu reports record sales in 2008 which it credits to an expended distribution network. Nichiyu now has 15 dealers across Australia.

Nichiyu’s so-called premium dealer network provides supplementary sales, hire and service resources in key industrial locations in Sydney, Melbourne and Adelaide, with further dealers to be appointed during 2009.

Nichiyu has also established supply agreements with a number of national forklift hire and other equipment distributors.

"Increasing our direct sales presence has improved our awareness and is paying off in increased sales," Coles says.

The growth of the battery-electric materials handling equipment market is also helping sales.

"With the recent surge in fuel prices, we certainly found more gas truck users contemplating the switch to battery-electric forklifts," Coles says.

"The average forklift burns through over $5000 a year in LPG, and much more for petrol and diesel models. A battery-electric is normally more expensive than a gas truck, but the price basically includes the cost of the first five years fuel.

"With gas trucks incurring operating costs of more than $5000 a year, it doesn’t take long for the battery-electric solution to come out on top, even with fuel prices returning to more sensible levels.

Environmental and OH&S concerns are also driving the switch to battery-electric materials handling solutions for many users. Accordingly we expect battery-electrics to maintain their strong sales performance, even if the overall forklift market contracts somewhat," he said.