Time to keep the faith
August 1st 2008

BITA's Economic Forecast says predictions of economic meltdown are well wide of the mark, James Clark explains

Times may be tough but it's not all doom and gloom. James Clark, Secretary General of BITA (the British Industrial Truck Association) reveals some of highlights from its new members only Economic Forecast report.

In the present period of economic uncertainty, occasioned by the 'credit crunch' and also the surging price of oil, BITA is taking steps to help its members make the best possible business decisions.

At BITA's 23rd AGM in May it announced its new Economic Forecasting service for BITA members. A 30-page 'Forklift Market' report, was distributed at the AGM, examining likely short and medium-term developments in the industrial truck market, based on observed trends and predictions for the global economy as a whole.

The economic forecast has been provided by Oxford Economics. Developments in the forklift market are a central theme of the new economic forecast. Oxford Economics predicts a 3% downturn of orders in 2008, stability in 2009 from 2008, and a subsequent increase of approximately 3.5% year on year, in terms of units, until 2012.

The report provides a 'bigger picture' overview of the wider UK and global economy, as well as analyses of specific sectors, such as Distribution and Transport Services. Drawing upon its own analyses, Oxford Economics sketches a detailed picture of UK and World Macroeconomic indices.

In the UK, it believes a sharp slowdown in growth is inevitable, but also suggests a recession is highly unlikely; instead, it anticipates a prolonged period of sub-trend growth. Households' financial positions are very different from the early 1990s when interest rates reached 15% and unemployment was rising sharply. And, despite sharp increases in energy and food prices, the Bank of England has much more scope to cut interest rates if the situation deteriorates markedly.

Looking at sectors, Oxford Economics sees a small decline for counterbalanced trucks in 2008. On the basis of its own statistics, BITA would expect this to see a fall in electric powered truck sales, with internal combustion engine powered truck sales remaining fairly static. In warehouse products, the forecast is for a decline of around 4% in 2008, with a rise of similar percentages in the next two years. BITA's insight is that the market for rider warehouse products – 60% reach trucks, has fallen by over 12% from a peak mid 2005.

Over a similar period, pedestrian warehouse trucks – 60% transporters, have fallen by only 5%. Pedestrian products make up 60% of the warehouse sector and therefore have a far greater influence on market trends than rider products.

The full report is available to BITA members. See www.bita.org.uk

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