How'd We Do?
Economic downturn impacts business forecasts.
Throughout 2008, the economy was nothing short of a roller coaster. Initial reports called for a slow but steady year, and that's how it started out. However, in late September, the bottom started to fall out. Mortgage giants Fannie Mae and Freddie Mac crumbled and took a bevy of financial powerhouses along with them. A few weeks and countless revisions later, the government passed a financial bailout plan worth over $700 billion, and as of press time, things have not improved; in fact, they may be getting worse.
To find out what effect the uncertainty had on MHEDA members, The MHEDA Journal surveyed participants from its 2008 Industry Forecast.
The Slowdown Shows
What the final numbers tell us is that the material handling industry was not insulated from the downturn. This is evidenced by 50 percent of participating companies who reported lower-than-forecasted sales for 2008. Some reasons for falling short included a decline in the new equipment market, order postponements or cancellations, a generally weakened economy, a downturn in new construction and runaway fuel and steel prices. Overall, 72 percent of dealers projected an increase, while only 62 percent saw one. For more details, see the charts provided.
Bucking The Trends
There was a contingent of MHEDA members who were able to prosper in spite of the economic downturn. In fact, 38 percent of respondents' sales actually exceeded expectations. These companies exceeded expectations due to aggressive marketing efforts, acquisitions, an increase in e-commerce, improvement in the maintenance segment of their business and a boom in oil and gas in certain markets. As we head towards a year shrouded in uncertainty, it helps to take a look back and try to learn from the past.
| The Top 5 Challenges of 2008 |
| Predicted |
Actual |
| 1. Finding and keeping quality employees |
1. General economic hardship |
2. Increased costs of doing business
(fuel, insurance, steel, etc.) |
2. Finding and keeping quality
employees |
| 3. Employee training |
3. Skyrocketing commodity costs (fuel, steel, lead) |
| 4. Using technology more effectively |
4. High tax rates |
| 5. Finding new customers |
5. Increased price pressure |
|
|
|
