US material handling systems & equipment demand will increase 5.2% annually through 2006.

The market for conventional and advanced/automated material handling systems and equipment in the US will increase 5.2 percent per year through 2006 to $23.5 billion, an improvement over the early 2000s performance which was characterized by recession and a weak capital investment climate. Along

with economic recovery, demand will be stimulated by technological innovations resulting in improved productivity and efficiency, increased safety and greater ease of operations, especially in such advanced/automated segments of the business as material handling robots, automated guided vehicles (AGVs), material handling software and high-end services (e.g., systems integration). These and other trends are presented in Material Handling Systems: Advanced & Conventional, a new study from The Freedonia Group, Inc., a Cleveland-based industrial market research firm.

Demand for conventional material handling equipment--industrial trucks and lifts, conveying equipment, and hoists, cranes and monorails--will improve from recent levels but will not grow as rapidly as the more dynamic advanced/ automated segments. The same will be basically true of the more established automated products such as automated storage and retrieval systems (AS/RS) and automated conveyors. The extensive amount of investment made in these types of products during the long economic expansion, coupled with the relatively long useful lives of most equipment, will translate into a less robust rate of growth than was experienced during most of the 1990s.

The market for advanced/automated material handling systems (including unbundled software and third party-provided services) is projected to increase 6.6 percent per year through 2006 to $6.8 billion, noticeably faster than its conventional products counterpart. Along with recovering capital investment in the economy at large, gains will be fueled by the superior productivity-raising potential of advanced systems, magnified by aggressive vendor efforts to further upgrade performance at comparable or lower costs.

Increasingly, material handling equipment and systems will be computer-integrated into larger-scale factory automation and automated warehouse-type environments, where they will be linked to other aspects of the supply chain management process (inventory control, materials purchasing, etc.). Reflecting this emerging trend is the recent popularity of so-called material handling control systems, which provide a common interface between different types of material handling products within a facility.

Material Handling Systems: Advanced & Conventional (published 05/2002, 268 pages) is available for $3,800 from The Freedonia Group, Inc., 767 Beta Drive, Cleveland, OH 44143-2326. For further details, please contact Corinne Gangloff by phone 440.684.9600, fax 440.646.0484 or e-mail pr@freedoniagroup.com. Information may also be obtained through www.freedoniagroup.com.

A limited license to use or reprint information from this news release is granted to you provided attribution for same--including, if possible, the price of the report--is given to The Freedonia Group, Inc. (Cleveland, OH). We would also appreciate the courtesy of receiving a copy of the article or publication in which we appear.

US MATERIAL HANDLING SYSTEMS & EQUIPMENT DEMAND
(million dollars)

                                                            % Annual
                                                             Growth

Item                               1996    2001    2006   01/96   06/01

Material Handling Systems
    Demand                        15045   18220   23500     3.9     5.2
  Industrial Trucks & Lifts        5078    5985    7500     3.3     4.6
  Conveying Equipment              4753    5755    7250     3.9     4.7
  Hoists, Cranes & Monorails       1251    1575    2000     4.7     4.9
  Automated Storage & Retrieval
    Systems                        1981    2335    3050     3.3     5.5
  Other Hardware                   1341    1660    2250     4.4     6.3
  Software & Services               641     910    1450     7.3     9.8

[c] 2002 by The Freedonia Group, Inc.

Contact: Corinne Gangloff Media Relations phone: 440.684.9600 fax: 440.646.0484 pr@freedoniagroup.com