The Industrial Truck Associations' Booked Orders Index increased 12% to 133.7 in the second quarter despite a dip to 122 in June. The trend is clearly up with an increase to 148 forecast by year-end and 158 by the end of 2004. These gains will be driven by sustained improvement in retail sales, exports and manufacturing production that began in May and will strengthen later this year. Goods purchases are being boosted by a falling dollar and unusually stimulative federal tax and credit policies. The quantity of goods purchased or stored is increasing after a three-year decline.

Following its seasonal pattern, the booked orders index from the Conveyor Equipment Manufacturers Association fell 20% in the second quarter, with unit handling equipment accounting for all of the decline. Meanwhile, overall conveyor sales rose 3.0%, and are now 2.3% above the same quarter last year. Conveyor orders are forecast to track other industrial equipment with a sustained two-year rise that began in mid-2003. This will result in a 4.4% gain in 2003 and about 19% next year. Sales will expand slightly more than orders this year but will trail the gain in orders next year.

Coming off of a war-related nine-year low last spring, materials handling shipments have started to recover. Shipments of equipment tracked by the U.S. Census Bureau moved from $1.3 billion a month last spring to $1.314 billion by July. The orders forecast suggests that shipments will reach almost $1.5 billion a month by the end of next year. The midyear turnabout will leave total 2003 sales off 1.5% from last year but will boost next year's sales by 7.8%. Materials handling shipments will recover more slowly in manufacturing than consumer markets that are handling imported goods.

As industrial investment began to rise this summer after prolonged stagnation, Modern's materials handling equipment orders index jumped 11% in July. All signs suggest that this is the beginning of a sustained gain through the end of next year. Annual year-to-year increases are forecast to be 2.4% this year and 12.3% in 2004. This will bring the index to within 10% of the exaggerated 2000 peak that likely will be reached in 2005. The initial turnabout is being driven by capacity additions in motor vehicles and warehouses, mostly on the West Coast, for the surge in Asian trade.