The Forklift and Conveyor Manufacturing industry is a mature industry with clearly defined markets and widely accepted product lines with few substitutes. A variety of downstream industries drive demand for this industry's diverse set of product lines: heavy infrastructure construction largely drives the need for forklifts, while freight and manufacturing industries make up most of the demand for conveyor systems. The export market for the industry's products also accounts for a significant portion of industry revenue, due to the growth of both infrastructure and manufacturing sectors in emerging markets.

“This low industry concentration makes it easier for companies to enter the industry (by reducing the cost of competing with incumbent firms) but it also results in a high level of price competition, particularly in light of recession-fueled constrictions on demand,” says IBISWorld industry analyst Jocelyn Phillips. “Manufacturers make moderate profit margins on their products depending upon the prevailing market conditions.”

Prior to the recession, favorable conditions in downstream sectors underpinned booming activity in the Forklift & Conveyor Manufacturing industry. At that time, exports were expanding as major players derived strong sales from Latin American and Asian markets. Then, the recession dramatically slowed downstream demand, thereby halting industry growth. By sharply constraining business investment, industrial production and trade, the financial crisis severely weakened demand for industry products. Decreased demand led companies to cut wages, slow production, or exit the industry altogether, and industry revenue fell sharply, even as profit margins stayed high. Recovery in the freight and manufacturing sectors have since driven a rebound in downstream demand; consequently, revenue is expected to grow at an annualized rate of 2.3% in the five years to 2013. Although industry revenue is expected to decline 0.5% in 2013, largely due to federal budget cuts, overall revenue is expected to total an estimated $33.5 billion for the year.

“Beyond 2013, industry performance will continue to strengthen as key downstream markets recover in line with falling unemployment and renewed consumer spending and business investment,” says Phillips. Demand from heavy infrastructure construction has lagged behind the broader economic recovery, but it is expected to surpass prerecession levels within the next five years, as is demand from manufacturing and freight.

IBISWorld industry Report Key Topics

Firms in this industry manufacture equipment used to lift or move materials. Major products include forklifts; industrial tractors and trucks; escalators and elevators; conveyors; overhead hoists, winches, cranes and monorail systems; and related parts, attachments and equipment. This industry excludes firms that manufacture construction-type tractors and cranes; these firms are included in the Construction Machinery Manufacturing industry (IBISWorld report 33312).

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