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The recession of 2007-2008 came as a shock to most Americans and many have still not gotten over it. Everywhere you look, you’ll find “experts” warning that another bubble is on the near horizon. While others are not so pessimistic, caution is still in the air. The after-shock of the recession may be holding our economy back from a faster recovery as businesses continue to take a wait-and-see attitude. If you are one of those who are still sitting on the sidelines, maybe it’s time to get back into the game.
According to the quarterly Material Handling Equipment Manufacturing (MHEM) Forecast released in January of 2014, orders of material handling equipment were up by 7.4% in 2013 and were expected to increase again in 2014 and 2015. This can only mean one thing: savvy businesses are expecting continued economic growth and are preparing for it by ordering material handling equipment.
Industry insiders told DC Velocity that the reason for the buoyant outlook for material handling equipment was the improving U.S. economy and brighter outlooks for overseas economies that were hit hardest by the recession.
Taking a Long View
The Great Recession that started in 2007 made many business owners take a short view of history and overlook the long history of the U.S. economy. Taking a long view should be enough to restore confidence. Before 2007, the Great Depression of 1929 was the most catastrophic downturn in America’s economic history. In the 78 years in between, though, there has been a succession of economic peaks and troughs. Since 1948, 11 recessions have been recorded. We’ve survived them all and the overall trend has been one of growth.
With growth has come change. Much of the change has been thanks to the recessions, which forced businesses to trim the fat off their spending and find ways to become more productive at a lower cost. One of the best ways to do that is by spending money on more efficient material handling equipment, which is exactly what is happening today.
In times of rapid growth, companies look for the newest and shiniest equipment. Cost is no object as long as the equipment pays for itself. When the next recession hits, the equipment no longer pays for itself and becomes a burden rather than a boon. Since the most recent recession, even larger companies have been rethinking their priorities and instead of replacing essential material handling equipment such as forklifts, they’ve been embarking on better maintenance programs for their existing used forklifts and other equipment and using their financial resources to upgrade outdated equipment.
There is good reason to be optimistic about our future. While growth isn’t expected to be stratospheric over the coming years, many signs suggest growth will continue at a steady pace. In the long run, steady growth is often a sign of stable and sensible growth. This is what the upswing in material handling equipment sales is telling us. Companies wouldn’t be ordering more new material handling equipment if they weren’t anticipating a need to handle greater quantities of materials. Now the question is: are you ready to ride the wave of growth or are you still taking a “wait and see” approach?