The MHEM quarterly material handling equipment manufacturingforecast for October 2016 was released with a forecast of a significant declinein new orders expected in 2017.

MHEM reported U.S. material handling new orders for 2015 at a recordhigh of $33.7 billion, with domestic demand also at a record level of $33.5billion. The report went on to say that material handling growth has slowedsignificantly in 2016, but some improvements are expected for the year as awhole. For 2017, they reported seeing significant downside risks, but subsequentimprovements in 2018 and 2019.

Downside risks include the recent slowing in domestic manufacturing,the slowdown in oil & gas, the relatively strong dollar, slowing globalgrowth, Brexit, and volatility in U.S. equity markets. A modest increase by 2.6percent is expected in new orders in 2016, but a decline of 13.9 percent isexpected in 2017. As has been their view since the end of 2014, Materialhandling and the entire U.S. economy could be in for a downturn between now andthe end of 2017.

Since the July 2016 MHEM forecast report, MHEM new orders data havebeen choppy. Unfortunately, although 2016 material handling data have beenbetter than expected, leading indicators for material handling still do notlook very positive, and the slowdown that has been forecasted for 2017 remainsin place for new orders, shipments and domestic demand.   

Although weakness is expected in 2017, MHEM forecasts for 2018 and2019 indicate those are likely to be years of improvement for the materialhandling industry.