The "Fits and Starts" Recovery

Clear signs of growth and a renewed commitment to material handling point to a slow but steady comeback.

Whether it's real, illusory or somewhere in between, something very much resembling an economic recovery is occurring, and that's definitely good news for the industrial sector. Getting out of a recession is often as much a matter of will as it is a purely cyclical occurrence, so any sign that things are getting better and will stay better is welcome indeed.

The timing was good, then, for NA 2010, the country's biggest material handling and logistics trade show, which was held last month here in Cleveland, virtually in MHM's backyard. The most frequently heard phrase at the show, and if I heard it once, I heard it 100 times, was “cautious optimism.” No one was saying that the dog days of 2009 were completely forgotten, nor was anyone saying that things were worse than ever.

The best news out of the NA 2010 show was a report from the Material Handling Industry of America (MHIA) forecasting 6% to 8.5% growth in material handling equipment new orders this year. This being the “New (Post-Recessionary) Normal” era, any predictions of growth have to, by definition, be weighed against the previous year, when equipment orders were off 37%, so it'll take a few years of 8.5% growth just to get us back to square one. But let's face it, growth of any kind sure beats the alternative.

“Industrial production activity is increasing, even though factory operating rates remain very low by historical comparison,” says Hal Vandiver, MHIA's executive VP of business development. “Demand created as the economy shifts from recession into recovery mode — filling supply chain pipelines, reestablishing inventories and responding to pent-up demand — is the principal impetus for improvement over the next few quarters in manufacturing, warehousing and distribution.”

Vandiver told me that he doesn't see any evidence of a double-dip recession. “What we're seeing right now is the initial surge of the recovery,” he explains, “and then we'll see it flatten out, then grow again.” Rather than a trend line headed north, the recovery's trajectory will look a little something like this: . Domestic demand for material handling equipment will grow by 1% to 2% in 2010. For want of a better term, we'll call it the “fits and starts” recovery.

The health of an industry — any industry — can be measured by the active interest its members take in the collateral community that surrounds it — user groups, trade shows, training seminars, business books, newsletters, videos, websites, industry associations and, yes, even trade magazines. That's as true for the material handling community as it is for the high-visibility industries, such as automobiles, computers and fashion.

Just days before the NA 2010 show began, the material handling industry lost one of its most prominent voices when Reed Business Information announced it was going to shut down two dozen of its titles, including Modern Materials Handling. For those of you who keep track of these things, both Penton's Material Handling Management and Reed's Modern Materials Handling were launched 65 years ago, and we've carried on a friendly rivalry that dates back to 1945. There's something to be said for longevity, and we were stunned to hear that our distinguished competition was being closed down. We have many friends and colleagues who worked for Reed at one time or another, and we were saddened for them and their families.

Fortunately, Modern's demise, while not exaggerated, turned out to be very short-lived, as we've heard the title will be revived by another publisher. Frankly, this is good news for the material handling community as it illustrates the vibrancy of the industry. The more people who are covering the material handling field, the better, especially publications that are so committed to the industry that they include the words “material handling” in their brand identity. As the marketplace lurches forward on its road to recovery, it's good to see that the publishing side of the material handling world is not shrinking at all but, in fact, just got a clean bill of health.

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