Market Outlook for Conveyors and Conveying Equipment

Although conveying equipment business conditions continue to be generally weak, there are signs that shipment levels are beginning to stabilize following an extended period of decline. After hitting a record high in 2000, US manufacturers’ shipments of conveyors and conveying equipment (NAICS Code 333922) fell 9.5% in 2001 and an estimated 24% in 2002. Industrial capacity utilization rates remain well below earlier peaks, but encouraging sales and profitability figures are beginning to be reported in some sectors. As a result, conveyor shipments are expected to edge up for the year as a whole -- increasing about 1% over 2002 -- with most of the gains occurring during the third and fourth quarters.

US conveying equipment shipments are projected to grow a much more robust 8.1% in 2004 and 7.5% in 2005 as the economic environment improves further, capacity utilization rates rise, and corporate profits climb. Conveyor suppliers will benefit from US businessesí renewed efforts to boost productivity by further automating their manufacturing, warehousing, and order fulfillment operations. Export sales of conveyors will also increase, spurred in part by declines in the value of the dollar against the euro and other currencies, helping to make US-made machinery more affordable.

Looking forward, the biggest unknown is the potential negative impact of continuing military clashes in Iraq and elsewhere -- and the constant threat of terrorist activity -- on US consumer and business confidence (and spending) during the next few years. On the other hand, increases in defense-related expenditures will contribute to future economic growth and, indirectly, conveyor demand.

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