Forklifts appear to be weathering the economic slowdown better than the rest of the materials handling industry.

Jim McManus, corporate manager of sales and operations for Toyota Industrial Equipment, says, "The market is a little slower than last year. Current forecasts place 2001 about 10% below 2000, but it will still be the third or fourth strongest year in history."

McManus expects forklift truck sales to begin recovering in the latter half of 2001 and to regain their 2000 levels by 2005. "Prices are stable," he says. "Prices for lift trucks have stayed fairly stable for the past five years so I don't feel that there will be much fluctuation over the next year. Recent increases have averaged less than 2%, but the slowing market may have some impact on price competitiveness."

Jack Schnelle, national products support manager for Hyndai, says, "We are still relatively new to the forklift market, but our prices haven't changed for a year and a half. Our total sales are up from last year, and we have actually seen a steady sales increase." He goes on to say that, "While the end of last year was really slow, we foresee good sales in April. Our only holdback has been our dealer base."

Mike Perry, sales manager for Michigan Industrial Equipment, says, "We're coming off of a tremendously strong sales month for forklifts. January was weak, February was average, and March was outstanding. Prices are stable, but we have seen finance incentives more than anything else."

The Freedonia Group, a market research firm based in Cleveland, Ohio, predicts that shipments of materials handling equipment in the U.S. will increase nearly 5% per year to $20 billion in 2004. The firm expects strongest growth from industrial trucks and automated systems, particularly robots, with the annual expansion rate exceeding 6% through 2004.

But, while the forklift sector seems to be doing well, the materials handling industry as a whole is a different story.

Jim Washington, vice president and general manager of Paltier, LLC, a producer of storage rack systems and related products in Michigan City, Ind., says that he's being forced to sell product at or below 1978 prices and he has invoices to prove it. "Demand is down 45% this year," Washington says. "Steel, the primary material for our product, is so low it scares us, and with the opening of new materials handling plants, I expect downward price pressure for my products to continue for two or three more years."

Shipments of materials handling equipment are still increasing at a 5% annual rate.