2008 Will Look A Lot Like 2007

ITA predicts a relatively flat year ahead.

By Stan Simpson

Last year, Jim Malvaso, then the president of the Industrial Truck Association (ITA), reported that 2007 would be slightly lower than the record year our industry saw in 2006. Now that 2007 is history, we can look back and agree that he was spot-on in forecasting what we would see for our industry.

Now it is time to look at our crystal ball and predict what 2008 will look like for our market. Many things appear the same as they did 12 months ago, but there are a few new things worth mentioning to support these predictions:

• The prime rate was lowered a full half percent.
• The slowdown in new home building is deeper than predicted.
• The value of the U.S. dollar has fallen a little more from last year.
• Unemployment fell to a very low number in the third and fourth quarters.
• Oil prices reached a new high of over $90 per barrel.
• The truck-ton-miles for over-the-road freight has not reduced as much as predicted (related to housing starts) and is still strong.

With all of these mixed signals, a person could easily predict that a larger slowdown in new truck sales is in the offing for 2008. However, during ITA’s annual meeting last September, this was not the case. Many top industry leaders predicted 2008 would look much like the current year. The second half of 2007 saw a small monthly decline in some forklift classes, while others remained strong. The predictions are for the first half of 2008 to be slower than the second half of 2007, but an increase in shipments during the second half of 2008 will result in an annual total that is almost equal to or slightly above 2007.

When we compare 2007 estimated unit volumes by truck class to what we predict for 2008, we see no reductions and a few increases. The numbers in Table 1 are based on estimates that the ITA Board made last July, so the data are a bit dated, but the survey showed a small increase for Classes 1 and 2 over 2007 with the other classes of trucks remaining equal to the 2007 numbers.

When you think about the overall size (unit volume) of our market, it is a positive reflection on our industry that we can maintain an annual shipment rate of almost 200,000 trucks per year. The table below shows this in a simple chart format.

When you compare the material handling industry with most of our other major segments, you soon realize that we continue to perform as a very stable and predictable business segment. Technology advancements, as well as increased operator training, continue to support the fact that we are one of the core industries that keeps America strong and in a leadership position. Our industry continues to reinvest a large portion of its earnings back into new technology in order to continue to provide better product with reduced operating costs and higher up-time records.

2008 will see a continued increase in many of the new technologies like AC power systems, on-board diagnostics, fuel cell power, increased operator safety features and new load handling attachments. Our industry has a lot to offer to the users of material handling equipment.

In 12 months we can look back on the year and see if we continue to take the lead of all the industrial countries around the world when it comes to powered industrial trucks and after-the-sale support that allows us to be number one in this segment!

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The MHEDA Journal • First Quarter 2008 • Volume 37, No. 1 • Contents are Copyright © Data Key Communications, Inc.
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