Industrial Machinery

In conjunction with anticipated expansion in capital expenditures in 1974, shipments by the selected general industrial machinery industries should increase by approximately 7 percent to over $13 billion. Substantial growth in 1973 boosted annual shipments to over $12 billion, 10 percent over the 1972 level. Shipments of materials handling equipment increased 16 percent, while air conditioning and commercial and industrial refrigeration equipment were up 10 percent; both are expected to expand 8 percent in 1974. Industrial pump and compressor shipments are expected to increase 5 percent in 1973 and another 5 percent in 1974. The general industrial machinery industries continue to maintain a favorable trade balance of almost $1 billion or three times the import level.

Exports of general industrial machinery con

tinued to expand at a rapid rate and are expected to reach almost $1.3 billion in 1973, over 11 percent of total product shipments. In 1974, air conditioning and refrigeration equipment exports are expected to expand another 10 percent to $600 million and materials handling equipment exports should reach $300 million, an 11 percent rise over 1973. Pump and compressor exports are expected to reach $475 million in 1974, an increase of 6 percent over 1973.

Imports increased about 14 percent to $380 million in 1973, but still remain relatively small, representing about 3.6 percent of apparent consumption. In 1974, imports are expected to increase about 11 percent to $425 million.

By 1980, combined shipments of general industrial machinery products are expected to

reach between $18.7 and $19 billion, reflecting an average annual growth rate of 7.2 to 7.5 percent. Exports may exceed $2 billion by 1980 and imports could expand to $680-$700 million or about 4 percent of apparent consumption.William E. Fletcher, Transportation and Capital Equipment Division.

MATERIALS HANDLING EQUIPMENT Product shipments of materials handling equipment established a new record in 1973 of approximately $3.14 billion, some 15 percent over the previous high of $2.7 billion established in 1972. Industry shipments, including all products and services, increased about 16 percent to a high of an estimated $3.4 billion.

The anticipated continued growth in the economy indicates a continued demand for materials handling equipment as the man-hour cost increases. As a result we anticipate product shipments of about $3.4 billion in 1974, an increase of some 8 percent over the record set in 1973.

During 1973 the strong trend of new orders continued to reflect the rapid expansion of the domestic economy, particularly the capital

goods sector. An important factor that must be controlled in capital expansion is the cost of materials handling, as is evident from the buying patterns of industries: they obtain the latest and most efficient cost-reducing materials handling systems.

The total number of employees and of production workers reached new highs in the materials handling industry; many factories ran at capacity, and overtime as well as extra shifts were common.

The division of product shipments among the sectors of the industry remains fairly constant with a significant increase in computerized retrieval systems.

Technical Changes and OSHA

At present only minor changes are being made in most materials handling equipment. Computer application in automatic retrieval systems continues to advance. In both the producing factories as well as in the end products the regulations of OSHA are being considered at every turn. Manufacturers are incorporating the latest safety devices into the end products, such as conveyors and forklifts, and

showed strength, and most established new sales records.

When the final shipment figures for the industry are available, the increase for 1973 over 1972 may be substantially above the estimated 16 percent.

Foreign Trade Growing

The materials handling equipment industry is growing rapidly in foreign trade. As industrialized countries as well as developing countries realize the cost of materials handling they demand more and more labor saving machinery. This trend will continue and the U.S. industry, which has a lead in this field, should be able to extend this advantage and increase export sales. The potential rests not only with basic equipment such as pallets and lift trucks; a great potential exists in the developed countries for advanced equipment including computerized parts control.

Imports in 1973 are estimated at $140 million, an increase of 22 percent over the record set in 1972. All types of machinery were imported; imports of forklifts, especially from Japan, were very strong. The cost and quality of imported forklifts result in a very competitive situation not only here in the U.S. but also in other foreign markets, where Japan is taking an active position in the industrial truck field.

We anticipate an additional increase in imports in 1974 of about 14 percent to an approximate total of $160 million.

Exports continued their growth in 1973 with a strong showing of about $270 million, some 16 percent over 1972. This export expansion should continue in 1974 and reach approximately $300 million for an additional 11 percent over 1973. The potential for export growth should remain strong as labor costs increase and the cost of materials handling becomes an increasingly more important factor in the economical operation of most industries.

Advanced U.S. technology, plus devaluation, should keep U.S. industry very competitive in the years ahead.

Growth Potential Strong Through 1980

The materials handling industry should maintain a steady growth through the remainder of this decade since it will be necessary to reduce costs at all points of production

as the cost of labor rises. Expanding plant and equipment expenditures will continue both here and abroad, and all these expansions will include some form of materials handling equipment.

Product shipments in 1980 are estimated to reach $5.45 billion to $5.67 billion, reflecting compound annual rates of growth from 8.2 to 8.8 percent. The actual rate of growth will be influenced by the acceptance of U.S. computerized advanced materials handling systems abroad and level of foreign manufacturing capabilities of such products as fork lifts.

It is estimated that exports will continue to grow at a compound annual rate of about 7.5 percent, reaching approximately $450 million in 1980. Exports will consist mostly of specialized machinery.

Imports will also continue to grow and should reach about $240 million by 1980, a compound annual rate of growth of about 8 percent. Much of this equipment will be standard.

During 1973, devaluation assisted the U.S. industry, and its effects will continue to help in the immediate years ahead. The continued need for the reduction in materials handling costs in the developed nations presents a continually growing market for U.S. equipment that employs advanced technology.-John A.

Lien, Transportation and Capital Equipment Division.

PUMPS AND COMPRESSORS

Shipments by the pump and compressor industry are expected to reach $2.9 billion in 1974. This is a 5 percent climb from the 1973 level estimated at $2.8 billion. The total value of pumps and compressors shipped by all industries (product shipments) is expected to be about $2.5 billion in 1974, a 5 percent increase from 1973.

This industry is important to the economy because pumps and compressors are required for the movement and control of liquids and gases in numerous applications. The anticipated expansion in public water, sewage, and power systems as well as growth in petroleum and gas production assures a growing market for pumps and compressors. Growth in the areas of chemical processing, construction, food processing, and mining will also stimulate sales of this equipment.

The pump and compressor industry consists of some 660 manufacturing establishments. About three-fourths of the production takes place in the Northeast and North Central States. Major suppliers to the industry are iron and steel mills, foundries, and forge shops; aluminum producers; copper producers; suppliers of electric motors and generators; and engine manufacturers.

Primary consumers of pumps and compressors are construction contractors, water and sewer works, power plants, mines, chemical plants, petroleum and gas companies, and the maritime industry.

Prices of pumps and compressors rose 24 percent between 1967 and 1972, or at a compound annual rate of 4.4 percent. This upward trend of prices is expected to continue because of rising material and labor costs and because the industry's products are becoming more complex.

Equipment Trends

Advances made in engineering, metallurgy, and production techniques are important in the manufacture of improved pumps and compressors. Greater quality control is required in the production of pumps and compressors which handle and control greater volumes of