Members share their predictions for the 2024 economy.
Distributors and Integrators Will Seize Opportunities in 2024
By Nicole Needles
The following are responses from MHEDA distributors and integrators across North America about what they forecast for 2024. They share their thoughts on the year ahead and the obstacles and opportunities they foresee playing important roles for both them and the broader economy.
2023 and 2024 will be formative years that will set off the trajectory of how our economy will behave in the future. How MHEDA members operate their businesses, make spending decisions or pass on their companies to future generations are all contingent on what the economy does. Distributors have thoughts on what the next year holds.
Over half of survey members reported that they expect their business sales to be up, or to remain steady at the very least. As expected, the main concern for 2024 is the economic uncertainty among many distributors and suppliers alike. Another issue they foresee, however, is labor shortages. This is no secret to anyone in the industry. There is a skills gap with economic hardships, and the younger generation tends to stray from material handling positions. Members expect this to continue next year.
We’ve seen a few macroeconomic trends this year, the most glaring ones being inflation, wage pressure and labor shortages. Almost all distributors indicated that they expect these trends to continue. This goes hand-in-hand with interest rates. This is not ideal in itself, but it can make larger purchases more expensive for customers. Members such as David Schneckenburger with Thompson & Johnson Equipment Co., Inc. note “I’m concerned for long-term interest rates. It appears today’s level of rates is the new norm.” He noted the biggest problem overall, however, would be labor shortages. Despite this, Schneckenburger is looking forward to the business opening new locations in 2024.
Luckily, as Brian Beaulieu says on page 43, any supply chain issues are residual from the disruption in 2020 and are not anything new. Jerry Weidmann, president of Wolter Inc. says “I expect the supply chain to substantially catch up in 2024 with the supply chain normalizing in 2025.”
As for new markets emerging, the top niche sectors that members see emerging are, unsurprisingly, automation, AI and robotics. Many distributors acknowledge that automation, AI and robotics are going to make even more waves than they already have in 2024. Industry thought leaders are taking these new trending markets and running with them rather than remaining wary. A new era of automation becoming commonplace is on the horizon. As for the forklift market, John Faulkner, president of Industrial Forklifts, Inc. says “I think the new industrial forklift market in 2024 could be off as much as 23 to 26% based on back orders and current market conditions.”
While around 24% of both distributors and suppliers indicated they do not have plans to expand their businesses next year in any capacity, the remaining amount of survey respondents indicated they have plans to expand their markets when it comes to new facilities, product lines, lines of businesses and mergers and acquisitions. Despite the overwhelming economic uncertainty concerning many industries, it’s safe to say that MHEDA members are viewing it as an opportunity.
Greg Brown, president of WW Cannon for instance said “We continue to grow our business by offering additional services that complement the product lines we sell. If the economy slows due to recession I expect softening of prices and a reduction in inflation.”
As mentioned earlier, one of the top concerns was being unsure of what the economy would bring, but a large portion of distributors still have plans to expand and grow their businesses and explore new ventures in 2024. Speaking of new ventures, we’re getting past the initial learning curve of the aforementioned niche markets and are learning how to efficiently integrate them into business practices, leading to growth and success. One of the markets that are becoming more integrated for distributors and integrators is lithium-ion batteries and electric forklifts, as Denis Benden president of Benco Industrial Equipment, LLC points out. You can read more about the rise of lithium-ion batteries and material handling going greener in the Q4 2023 issue of The MHEDA Journal on page 44.
Members need to note that with the economic uncertainty in the upcoming year, seeing it as an opportunity rather than a detriment is crucial to a surviving – better yet, thriving – business. Duncan Murphy, president of Riekes Equipment says, “The pace of change is accelerating,” when it comes to the economy. Given this, adaptation and having a sound business strategy is the way to go. Be proactive rather than reactive in this coming season.
Brian Harris, general manager at Frontier Forklifts even says, “By all indications, the United States will suffer a weaker economy overall as we move into 2024. We expect that trend to be short-lived and that a steady recovery will emerge late in the second quarter.” That’s why, Harris shares, “We are hiring more sales personnel which will drive more parts, service and rentals as well as equipment sales. Labor shortages and inventory shortages are still a reality that we have to overcome every day. We choose to grow.”
Overall, it seems distributors are cautiously optimistic about how the economy will behave in the coming months. Robert Burkhead, vice president and general manager at Ring Power Lift Trucks says “Our business has had an incredible three years running. Although I’m expecting 2024 to be economically flat, I’m very hopeful we’ll continue our growth and prosperity with new products, services and added share of the market.” Similarly, Tom Albero, MHEDA chairman and CEO at Alliance Material Handling, Inc. says “Opportunities are out there. You just have to seize them!”
