Member Forecast
MHEDA Member Economic Survey Reveals Cautious Optimism
By Nicole Needles
AS MHEDA MEMBERS prepared for 2025, an extensive survey of 82 respondents revealed the material handling industry’s expectations, major concerns and evolving strategies. With respondents spanning distributors, integrators, manufacturers and service providers, insights reflect optimism about growth and concern over economic variables like the new administration, geopolitical factors and interest rates.
Diverse Representation and Projected Sales Growth
The survey covers a diverse range of the industry: 67.07% identified as distributors, 23.17% as manufacturers and 19.51% as integrators, with a few in specialized services. Respondents primarily represented segments in industrial trucks, storage and handling and systems integration. Despite the varied representation, 60.98% of respondents expect their sales to increase in 2025 compared to 2024, while 26.83% project stable sales and 12.20% foresee a decline.
Justin Bailey, president of Bailey, shares cautious optimism, projecting growth in aftermarket services despite anticipated reductions in new equipment orders. “The biggest variables impacting projections are future interest rate reductions by the Fed, any potential instability surrounding the election and the direction of the expanding war in the Middle East,” Bailey notes. This sentiment is echoed by many, emphasizing the industry’s wariness of macroeconomic trends while underscoring its resilience and adaptability. We’ve seen this throughout many historic events in the material handling industry.
Key Economic Concerns Impacting Projections
The U.S. election prior to its result was cited as a primary factor influencing forecasts, with 37.80% of respondents highlighting it as a significant concern. Dave Haight, CEO of Mid Atlantic Industrial Equipment Ltd., expresses the shared sentiment that “as with most election years, we look forward to the election being over regardless of the results.” This uncertainty, typical in election cycles, is compounded by concerns over international geopolitical shifts and federal interest rate policies, with 14.63% pointing to these factors as potential disruptors.
Curtis Smith, senior financial representative at Principal, also emphasizes the complexities of labor shortages and skilled workforce retention. “Attracting and retaining workers amidst labor shortages, prioritizing safety training and upskilling employees are priorities,” he says. This labor gap remains an industry-wide challenge, as companies must balance automation costs with the need for skilled operators.
Growth and Expansion Strategies for 2025
Survey respondents shared several approaches for growth, including new product lines (17.07%), expanding business lines (13.41%) and mergers and acquisitions (10.98%). In contrast, 25.61% indicated no expansion plans, mostly mentioning economic uncertainties as the reason. For those pursuing growth, leveraging new product offerings and geographic expansion emerged as core strategies. Karl Scholz, president of Pacline Corporation, emphasizes a focus on automation: “Large distribution warehouses with increasing automation are our main business,” he explains, adding that reshoring initiatives may provide further stability.
Further illustrating expansion efforts, Matt Larson, president of Cass Hudson Co., anticipates “modest growth due to interest rates coming down” and predicts more certainty after the transfer of power to the new administration. For some companies, such as Ferag America, this period represents a foundation year. CEO Juan Cadrecha sees 2025 as a “transition year, with moderate growth,” while focusing on preparing for substantial expansion in 2026 and 2027.
Identifying Growth Opportunities in Emerging Markets
Interestingly, 60.49% of respondents identified niche and emerging markets as vital to their growth strategies. Areas such as automation, robotics, lithium products and AMRs were frequently mentioned. Jonathan Ward from Ethium by Econtrols expects substantial growth in lithium-related markets, noting that “electrification of all industries will continue due to new government regulations.” This aligns with increased interest in sustainable energy solutions across industries.
Additional niche markets showing promise include aerospace, healthcare, grocery logistics and very narrow aisle storage. The industrial battery service and automation segments also hold potential, as companies anticipate that increased demand for robotics and advanced warehousing technologies will support future growth.
Jim Shaw, president of Zion, remains optimistic about 2025: “Signs are positive that the industry will rebound in 2025. Companies that have invested in people and partners will be well-positioned for growth.” Shaw underscores that a rebound is not only possible but likely for companies with the foresight to invest in operational improvements and long- term relationships.
Shifts in Workforce Strategies and Industry Adaptations
The material handling industry’s proactive stance on addressing labor shortages and changing workforce demographics was another survey trend. Companies are increasingly implementing flexible work arrangements and prioritizing diversity to attract younger talent. According to Curtis Smith, “Key trends include prioritizing safety training due to the physically demanding nature of the work, upskilling employees and adapting to a changing workforce demographic.” As automation becomes more integral to operations, workforce upskilling and safety training are emerging as essential elements of growth strategies.
Several respondents also emphasized the importance of data-driven decision-making and fostering a culture of continuous improvement to retain skilled workers and enhance operational efficiency. With labor challenges remaining an ongoing concern, these strategies are expected to play a crucial role in sustaining growth.
A Year of Transition with an Eye on Long-term Resilience
Although some respondents anticipate a difficult year in 2025, many are optimistic about the industry’s long-term trajectory. Brian Pfannes, president of Steel King Industries, anticipates a “grind it out” year in 2025, driven by a combination of Fed policies, inflationary pressures and geopolitical challenges. Yet, he remains optimistic, noting, “As interest rates do begin to ease, I’m optimistic that we’ll start to see business leaders across the spectrum begin to accelerate those supply chain-centric investments again.”
Other respondents, like Steve Miskelley, VP of sales of MHS Conveyor, expect consumer confidence to rise post-election, which could stimulate industry growth in Q2. Likewise, Jeff Cordick of Forklift Services of America sees a “gradual recovery” on the horizon, although he warns that current economic headwinds may persist until mid- 2025.
An Industry Preparing for Change
The thoughts of these MHEDA members reflect a diverse and dynamic industry bracing for economic shifts while remaining focused on emerging opportunities. Members recognize that while 2025 may bring challenges, the year also represents a foundation for growth and resilience. Companies are channeling their efforts into automation, sustainability, workforce strategies and data-driven insights, preparing for a future where adaptability will be essential.
The collective insights from MHEDA members demonstrate the industry’s readiness to navigate the complexities of the coming year, with an eye toward sustainable growth and innovation that will fuel the material handling sector’s long-term success.
