2012 Conveyor Outlook

- Capital Equipment, Market Information & Reports

Leading indicators suggest a mixed outlook for unit conveyor sales in 2012.  The Purchasing Managers’ Index (“PMI”) and Consumer Confidence Index (“CCI”), the most highly correlated leading indicators (12 months leading) for conveyor and other material handling equipment purchases, moved in opposite directions in December 2011.

The PMI rose 0.2 points to 54.1 in January 2012, the third consecutive monthly increase.  However, it is still below the 2010 average of 57.3 and 2011 average of 55.3.

The CCI fell 3.7 points to 61.1 in January 2012.  The index had surprisingly risen almost 24 points from October 2011 to December 2011.  Economists speculate that the CCI drop in January reflects consumers’ lingering concerns over slow job growth and a drop in home prices.

M&A Activity:  Despite the uncertain outlook, active consolidators – both financial and strategic – are aggressively pursuing acquisitions of attractive unit conveyor manufacturers and the parts manufacturers that supply them.