John Meale, vice president of FEM, which represents the materials handling industry in Europe, and managing director of Thorworld Industries.

The European Federation of Materials Handling (FEM) is advising its members to prepare for another decline in the economy as materials handling sales appear to have reached their lowest levels.

John Meale, vice president of FEM and managing director of Thorworld Industries, says the global recession has hit the industry hard and is likely to affect it further.

"The good news is that sales now appear to have reached their lowest levels and Europe, including the UK, is pulling out of recession - but FEM is greeting this news with caution and we are advising our members to prepare for the very real possibility of a 'double dip'," Meale warns.

He explains that cuts have been widespread in the private sector but that hasn't been true for the public sector. "With the installation of the new coalition government [in the UK], that is now being rectified through cuts and increased VAT and taxation in a bid to repay the huge debts incurred as a result of the banking crisis ... this is likely to result in the second dip for the materials handling industry."

Meale urges FEM members to be wary of signs of recovery in the economy and to remain cautious about undertaking substantial investment.

According to FEM data, in 2008 and 2009, industrial trucks have seen sales drop by up to 40%; mobile elevating work platforms between 65% and 70%; racking and shelving up to 40%; elevating equipment between 35% and 40%; cranes and lifting equipment between 40% and 50% and intralogistics systems up to 20%.

Meale says his company, Thorworld Industries, had been forced to make redundancies as sales dropped across its entire product catalogue.

"More worryingly still, we have also seen a drop in levels of maintenance that can put employees at risk and cost companies dearly in the long run in terms of repairs," he adds.

Leading UK construction equipment maker JCB has reported a pre-tax profit of GBP29 million (USD44.3 million) despite declining sales. JCB has made 1,800 redundancies to adapt to lowered demand for its products.

Last month, we reported that Toyota Material Handling UK (TMHUK) was resizing its Castleford site. TMHUK operations director Tony Wallis denied the redundancies were the result of the recession but indicated that Toyota was expanding elsewhere in the UK (Forkliftaction.com News #464).

FEM, which stands for Fédération Européenne de la Manutention, represents the interests of over 1,000 companies in Europe which employ 160,000 people and have a combined turnover of EUR45 billion (USD57.6 billion).