CEMA sees reversal of fortune this year
March 09, 2011 - MMH Editorial
Just how strong is the current economic recovery? Judging by the Conveyor Equipment Manufacturers Association’s (CEMA) 78th Annual Meeting in Palm Springs California last week, pretty good.
“While we can’t get too excited by the numbers we are seeing now, all indications are that we’ve turned the corner,” said CEMA president, Bill Pugh.
On hand to confirm that impression was Alan Beaulieu, president of ITR, an economic forecasting firm. As he has done at past meetings, Beaulieu presented a broad overview of global trends in manufacturing and distribution.
“If we see an increase in private sector hiring, the chance of a double-dip recession fades considerably,” he said. “But that means U.S. companies will have to generate 200,000 jobs per anum for the next 10 years.
And Beaulieu thinks that will happen for two reasons: banks are prepared to lend again, and interest rates are still low.
“More money is coming into the economy because the government is printing and borrowing more,” he said.
This observation mirrors that made by Modern Materials Handling research analysts who contend that equipment manufacturers are finally making long-term capital investments in new system upgrades again.
Noteworthy highlights from suvey results included the fact that the median amount of money spent by firms on conveyors and/or conveyor parts and accessories during the last 12 months was estimated to be $55,000. Eighteen percent reported spending $500,000 or more.
At the same time, system reliability remains far and away the most important factor in purchase considerations. However, the reputation of the equipment supplier and design flexibility are becoming increasingly relevant to buyers.
Beaulieu told the CEMA gathering (the largest in recent years) that investment in human capital was also key to a rebuilding strategy.
“It’s time to hire now if there’s any skill gaps in your operation,” he said. “And while you should be ruthless when it comes to efficiency, you should concentrate on retaining the best workers. Indeed, if you care about the people who work for you – give them raises. Productivity is at stake.”
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