Materials handling equipment orders post a strong finish in '99
Materials handling orders should be up 27.3% by the end of 1999 compared to the year-ago period.
By Daryl Delano -- Modern Materials Handling, 1/1/2000
The materials handling industry was clearly moving in the right direction throughout 1999. The exclusive Modern Materials Handling index of orders through the first nine months of last year ran 6.1% ahead of the January-September 1998 pace. The third quarter of 1999 was particularly strong, coming in 13.5% higher than during the third quarter of 1998. And when the final numbers for the entire year are in, we're expecting that the 1999 index value will show orders 6.4% higher than during 1998-recovering most, if not all, of the loss seen in 1998.Industrial trucks and conveyors showed a similarly healthy and improving pattern during 1999. Third-quarter 1999 industrial truck orders were 1.6% lower than in the previous quarter - but 19.0% above their level of a year earlier. On a cumulative, year-to-date basis, industrial truck orders through September of last year were running 3.4% ahead of the pace for the first nine months of 1998. We're estimating that full-year 1999 growth will come in at 4.6%-better than the paltry 0.8% gain in 1998.
Unit handling conveyor orders took more of a hit between the second and third quarters of last year than most other sectors. July to September 1999 orders for new unit handling equipment were 20.8% lower than during the second quarter, and more than 25% below the extraordinary first-quarter order level. However, an over-the-year comparison is once again key to the proper perspective.
From the second to the third quarters of 1998, orders for unit handling conveyors fell 19.8%-almost identical to the 1999 loss. But, more importantly, third quarter orders during 1999 were a whopping 30.4% higher than the same three months of 1998. On a cumulative basis, unit handling orders through nine months of last year were up 28.9% from the January-September 1998 total. For the year as a whole in 1999, we expect that total unit handling equipment orders will ultimately be up by 27.3% from the 1998 total - more than making up for the sharp 14.9% loss in orders volume experienced in 1998.
The 2000 MMH index of orders will likely be little changed from its 1999 average level. Although underlying demand for many kinds of materials handling equipment and services will remain strong and overseas market opportunities should improve, the U.S. economy as a whole will almost certainly grow more slowly during 2000 than over the past four years. The year 2000 flattening in materials handling equipment demand should be temporary, however. We're forecasting continued economic expansion through at least the year 2001, with the MMH materials handling index next year moving up about 8% following a modest 1% decline during this first year of the 21st century.
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