Confidence is building as companies seek a speedy recovery from a series of pandemic shutdowns, which has led to an unprecedented surge in demand for new lift trucks in nearly all market segments. However, as new data from UK Material Handling Association (UKMHA) explains that manufacturers are struggling to keep up with demand due to an ongoing shortage of vital ingredients.
After a 24% drop in bookings during 2020, orders are up this year, and the latest estimates predict a 38% increase by the end of the year. This figure represents a 5.7% increase in the figures for pre-pandemic levels for 2019.
With industrial demand expected to remain strong next year, experts at Oxford Economics in their Fall Economic Outlook, which were produced for the UKMHA component, BITA, projected an additional 6.5% growth in bookings for 2022.
However, while deliveries have also recovered — currently hovering around levels seen in 2016, economists have predicted that supply problems will continue to disrupt delivery schedules well into the year ahead before finally receding.
“While shipments experienced a solid recovery, they lag far behind growth in bookings,” the new report reads. “This is normal due to lead times between bookings and shipping, but it also likely reflects the broader supply chain issues affecting industries this year. We expect supply chain issues to continue well into the next year, but they will eventually improve, and businesses will continue to adapt. So, The backlog will continue to rise until next year.”
The situation is by no means unique to truck lifts; Almost all aspects of the manufacturing industry are currently being disrupted by the lack of essential components. The situation is aggravated by the shortage of labor, the escalation of fuel and energy costs, and the costs of raw materials.
However, high consumer demand continues to drive the market and this is expected to remain the case through 2022, despite inflationary pressures.
One of the main beneficiaries of the current situation has been the budget sector, which has experienced an amazing recovery. Prior to the pandemic, budget bookings were on the decline, falling more than 5% in 2019, with weakness most pronounced in the 4/5 category. The pandemic exacerbated the trend, with categories 1 and 4/5 down 21% and 34%, respectively, last year, with the declines most notable in the first half of the year.
Bookings saw a strong recovery throughout 2021 as pandemic restrictions eased. All classes rose well above 100% in the second quarter, while bookings for Class 1 continued to grow in the third quarter but fell for Class 4/5 from levels seen in the previous three months.
With industrial production expected to rise 5.6% this year, driven by strong consumer demand – a trend expected to continue into 2022, demand for trucks is expected to remain high.
All in all, we expect budget orders to rise 33% this year. In 2022 we expect bookings to exceed 2019 levels after rising 17%.”
If anything, the picture within the warehouse segment is more positive, with increased consumer demand affecting the market once again. The Oxford Economics report predicts that e-commerce sales are likely to remain high through 2022, compared to pre-Covid levels, despite the reopening of stores.
“We expect bookings to rise by 42.5% in 2021, which will lift the sector 15% above 2019 levels,” the report reads.
Wapples team (in the picture), UKMHA Chief Executive Officer, said: “While these results reflect an ongoing growth trend for 2021, they will provide an interesting read for our manufacturers and traders, who have experienced a difficult 18 months due to the pandemic.
“If the forecast is correct and growth can be maintained in the coming year, the UK material handling sector is looking forward to a very prosperous 2022. Thus, what is even more frustrating is that supply issues are disrupting the shipment of new trucks. Let’s hope the situation can be resolved sooner rather than later. Sooner – for the good of all.”