Over the last 10 years, the UK forklift market has risen dramatically from a low in 2009 of 17,658 units to just over 35,000 in 2018.
With all the uncertainty posed by Brexit it is reassuring to see that the materials handling industry fared a lot better than most last year. Whilst the overall figures for 2019 are down on those in 2018, when compared with the rest of the decade, they are very positive and auger well for the year ahead. We can only hope that the long-term trend of growth continues during 2020.
Statistics reported by BITA show that, overall, 2019 orders declined 1.75% on 2018 but still topped more than 34,700 units. This makes it the second strongest year of the last decade and there are now high hopes that, with an orderly exit from the EU, the British economy might begin to thrive once again.
We were also pleased to see that the performance closely aligned with the forecast outlined in BITA’s most recent Oxford Economics report. The forecast, released twice a year exclusively to BITA members, had predicted a strong year overall, with the forklift truck market in the UK holding firm in the face of Brexit headwinds.
The strength of the warehouse sector – a side-effect of pre-Brexit stockpiling – helped to bolster the market as Classes 2 and 3 both saw growth over the year. Looking ahead to 2020, the economists are optimistic that this trend will continue as the economy stabilises and household spending power increases.
Sales of classes 4/5 weakened last year, with electric trucks continuing to squeeze LPG. However, whether this is a temporary dip or the start of a long-term decline in the popularity of diesel-fuelled counterbalance trucks remains to be seen.
All the predictions in the Oxford Economics report are tempered by the fact the true state of the UK’s economy following Brexit is yet to become clear.
The report’s forecasts assumed a Conservative victory in the General Election and an orderly Brexit at the end of January, both of which occurred. However, the authors are less optimistic about concluding a trade deal with the EU by the end of the year; instead suggesting that an extension of the transition period by which the UK leaves the single market until the end of 2022 would allow a more realistic window to negotiate an agreement. Thereafter, they assume the UK and the EU will implement a free trade agreement.
UK industrial activity may be weighed down by Brexit-related uncertainty until at least the second quarter of the year, causing many firms to keep investment plans on hold, but a strengthening in GDP is expected to accelerate during 2020, with a concomitant impact on the warehousing and logistics industries as household spending power increases. However, whether this transfers to the whole materials handling industry remains to be seen.
Investment sensitive sectors such as industrial machinery are expected to be amongst the worst of those impacted and sluggish investment and the overall economic slowdown have also weighed on construction.
Increased public spending by a new government keen to move on from austerity should provide some relief and will support infrastructure activity. This, in turn, will stimulate the wider economy later in the year.
Not predicted by our forecasting, the emergence of the coronavirus also has the potential to impact not just the UK, but the global economy. A virtual shutdown of Chinese industry threatens to disrupt many international supply chains, especially manufacturing industry which is reliant on China for so many of its components.
One factor which may help to sustain the industry this year is innovation, with the report concluding that technological developments such as electrification and automation could help shape the market to a greater extent than previously expected.
Overall, we are confident that our sector is well positioned to maximise these opportunities. Integration between materials handling equipment and its working environment increases almost daily with clearly demonstrable social, environmental and economic benefits.