Forklift manufacturers target retail and wholesale for growth
05 June 2017
The latest Forklift Truck Market Outlook for 2017, produced by Oxford Economics on behalf of BITA, surveys the market outlook of forklift manufacturers.
One area where expectation has changed significantly is ‘which customer sector will show most sales in the coming 12 months’. In the Autumn survey no respondents chose ‘Retail and Wholesale firms’ as a key growth sector – in this survey 30% of respondents think this is the case.
The survey also shows member confidence has improved since the last survey in Autumn 2016 – with 85% of respondents feeling general prospects for the coming 12 months remain unchanged.
None of respondents in this latest survey said they felt ‘less optimistic’ for the next 12 months, compared to half of respondents who said this in the Autumn survey – and 15% felt prospects had improved.
However levels of optimism now, compared to the equivalent report in May 2016, are not as high. Taken across the last three Outlook reports, overall optimism was high in May 2016, taking a dip in the Autumn report, with optimism now returning in the current report, albeit at a lower level.
Attitudes to sales have also improved, with 85% of respondents saying they expected sales to either ‘rise modestly’ or ‘rise significantly’. Views on orders have also remained positive with 70% expressing that their order books are ‘modestly better than normal.’
This could reflect the strong order position prior to the referendum – as now only 15% feel their order books are ‘significantly better than normal’, down from 50% who thought this was the case in the Autumn survey.
Concerns around pricing have eased, although the expectation continues to be that prices will rise, driven by the devaluation of sterling. Only 30% now hold the opinion that prices will ‘rise significantly’ in the coming 12 months, compared to 66% who thought this previously. Prices are expected to ‘rise modestly’ by 70% of respondents.
Counterbalance orders have recovered a little after major falls registered last year, growing 3.6% year-on-year in Q1 2017. However it is not anticipated this will continue as investment – crucial to the performance of the Counterbalance market – struggles.
The warehouse segment has performed better, growing by 36% in the final quarter of 2016 – and by 5% year-on-year in Q1 of 2017. However, within Classes the picture is much more mixed. Class 2 bookings fell by 20% year-on-year in Q1. Class 3 performed much better, rising 21% in Q1 – and it is the strength of Class 3 that is holding up overall warehouse orders.
The Oxford Economics forecast for growth anticipates household consumption will rise by 1.5% this year, and just 0.5% in 2018. This will be compensated for to an extent by the weak pound increasing the competitiveness of exports, meaning GDP growth is forecast to be 1.8% this year and 1.4% next.
Jeremy Leonard, head of industry services for Oxford Economics, said: “Various risk factors cloud the outlook around this report, particularly of course Brexit and the outcome of the General Election. The tone of negotiations around Brexit appear volatile – and the final outcome of negotiations will not be clear for some time.
“Market specific risks remain of secondary importance compared to Brexit, while innovation still provides grounds for optimism. Here struggling orders may create new impetus for novel product offerings or new technologies.”
James Clark, Secretary-General of BITA, comments: “The previous Forklift Truck Market Outlook and members’ survey showed our members’ mood moderating as Brexit uncertainty continues – and forecast overall weaker economic sentiment as the industry digested the referendum.
“However this latest Outlook and survey has demonstrated a degree of confidence among our members, with none saying they felt less optimistic for the coming 12 months. This coupled with an improved attitude to sales makes for quite an optimistic picture overall. But we shouldn’t be complacent, there is still the great unknown of Brexit to come – and there are issues around investment which are affecting Counterbalance orders which are a potential cause for concern.”
The Forklift Truck Market Outlook includes a detailed overview of sector by sector performance, both in terms of forklift product categories and customer business divisions. It is prepared for BITA by independent economic consultancy Oxford Economics and is available exclusively to BITA members as one of the key membership benefits. The next Outlook report will appear in Autumn 2017.