A survey has revealed that 32 per cent of companies in the UK forklift industry are entering 2005 in a cautious mood.

The study, by Plimsoll Publishing Ltd, said 49 per cent of the survey respondents suffered a fall in profit since the 2003 survey.

"This supports the fact that margins are coming under increasing competitive pressure," said senior analyst David Pattison. "With current market growth negative at 5 per cent, perhaps a cautious approach is right."

The survey puts all companies into four "mood" groups:

Cautious
More than 30 per cent of companies are uncertain how 2005 will be; financial performance has been satisfactory; sales are falling by 2 per cent, with margins averaging 2.5 per cent.
"Nevertheless, most of these companies could be described as prudent, as they hardly carry any debts. If 2005 proves unfavourable, their balance sheets should offer some protection, but they must keep a close eye on aggressive competitors," the study says.

Upbeat
Only 11 per cent of companies are upbeat about their prospects for 2005. These companies are not having any trouble achieving extra sales growth, with many having increased sales by 9.4 per cent. They are also not seeing any reduction in margins - typically reporting margins as high as 5.5 per cent.

"Their priority for 2005 should be to build on their existing success. This will not be as easy in today's highly competitive industry," the study says.

Gung-ho
"Almost bullish" describes 29 per cent of companies in their prospects for 2005. These companies appear determined to press on with their aggressive pursuit of market share. These companies shared most of the growth in the market last year.

"It is an exciting time to be at one of these companies as employment is up from last year. Most are selling at a loss, a trend currently popular in the industry. Can they maintain this risky strategy?" the study asks.

Under Pressure
An equal share (29 per cent) of companies surveyed were finding the market more competitive than ever. All reported falling sales, some by as much as 10 per cent.

"Clearly this has affected their profitability, as three-quarters of these companies are selling at a loss. Their priority in 2005 should be to hang on to current sales, get on top of their costs, and reduce their levels of debt," the survey says.

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