After Tough 2009, Signs of Uptick in Investment in Material Handling Automation Going Into 2010

While 2009 was Largely a Bust, Food, Beverage, Consumer Packaged Goods, and Parts Distribution Now Showing Strong Activity, System Providers Say; Retrofits and Upgrade Projects also Active

2009 will go down as one of the worst ever for materials handling equipment and DC automation system sales.

Beyond the recession that crimped budgets and left companies hoarding cash where they could, distribution volumes dropped for most companies, reducing the volume pressures that are often the catalyst for distribution center automation projects.

The numbers from the industry trade group, the Material Handling Industry of America (MHIA), tell the sad but true tale: new materials handling equipment orders of all kinds will drop 35-38% when the year is over, according to the group’s economists.

In the conveyor segment (which includes manufacturing and distribution), new orders are expected to decline about 25% this year versus 2008.

Hal Vandiver, MHIA’s executive vice president of business development said last month that, “We are in the middle of a contraction this year, but the worst appears to be over.”

He says the group now predicts an increase in new orders in the 2-3.5% range in 2010. However, given the lag in shipments versus orders, shipments of materials handling equipment will still shrink 5.5% next year even with an increase in orders, MHIA says.

Jim Stollberg, VP of Business Development at HK Systems, also sees a strong light at the end of the 2009 tunnel.

“After a pretty tough first half, our Q3 was strong and our pipeline is growing,” says Stollberg.

“We are seeing more activity than we saw six months ago. We are seeing a combination of distribution center consolidations, retro-fits, expansions and new facilities being designed and implemented across a variety of industries,” says Peter Counihan, President of Fortna Inc., a large materials handling systems integrator. - Click Here to read to full article