Commercial Vehicles January 2023

Global Forklift Growth Cools in 2022

Maya Xiao
Maya Xiao

Maya has an interdisciplinary technical background in vehicle electrification, system automation and robotics. Based in China, she is the lead analyst for Interact Analysis’ Li-ion battery and forklift research, also covering markets for industrial and collaborative robots.

Interact Analysis has recently released the 3rd edition of its Global Forklift Market report. The study focuses primarily on the electrification and automation trends within the forklift truck sector. The effects of the war in Ukraine, rising commodity prices and inflation, as well as the 2022 lockdowns in China, have created a huge variation in the forecasts compared with the last edition.

Growth rate of global forklift shipments drops sharply in 2022

The European market has been affected by the Russian-Ukrainian war and the continuing energy crisis, North America has been hit by inflation, and the Asia Pacific region, especially China, has felt the effects of repeated COVID-19 lockdowns. Global supply chain challenges and economic recession have created further economic pressure for the US, Europe and APAC. The growth rate of the global forklift market dropped sharply from 23.4% in 2021 to 4.1% in 2022, while order volumes fell by 10%. In 2023, global forklift shipments will see modest recovery resulting from the accumulation of orders in the past two years, pushing up volumes.

Despite the short-term challenges, Interact Analysis remains optimistic about the long-term growth of the forklift industry. It is predicted that out to 2032, global forklift shipments will maintain an annual growth rate of 4%~5%. In 2029, forklift shipments are forecast to exceed 3 million units.

Global Forklift Shipments Forecast Comparison vs. 2021 Report

Neither the manufacturing industry nor logistics enterprises have slowed down the pace of investment in automation. The impact of COVID-19 in the past three years has highlighted the need for enterprises to reduce their dependence on labor. At the same time, labor costs continue to rise around the world. Therefore, in the long run, the demand for automation equipment will continue to rise steadily.

Demand from the manufacturing industry is still unstable, but many equipment manufacturers are adopting long-term investment strategies to manage the short-term storms. For example, many automotive manufacturers are still promoting full automation of new production lines while their profits are declining, in preparation for the switch to electric vehicles. In contrast, logistics enterprises are more acutely affected by short-term demand fluctuation and so are more sensitive to ROI. They will be more cautious about large capital expenditures when the economy is cold, but once it recovers, investment will swiftly follow.

The boom in E-commerce, which spiked during the pandemic, especially in APAC, has since returned to “normal” levels of growth. As a result, retailers are finding themselves under less pressure to automate their fulfilment centers, cooling the ultra-high growth rate of Class 3 (especially small Class 3.1) forklifts which we saw in the two years prior to 2022 .

The gap between order intake and shipments was the biggest ever in 2021

In 2019, the global forklift market experienced a flat year after continuous rapid growth in previous years. The global economic recession in 2019 and the uncertainty of the Sino US trade war made many manufacturing enterprises tighten their wallets. However, the gap between order quantity and shipment quantity has been kept within a relatively small range, with inventory and delivery times remaining relatively stable.

Since 2020, we have seen the gap between the order volume and shipment volume gradually expand, reaching a record 371,171 in 2021, as shown in the figure below. If we study the year-on-year growth rate of quarterly shipments and orders, we find that, in the last two years, the growth rate of shipments is only about half of the growth rate of orders, which shows that supply cannot meet the sharply rising demand.

Since the second half of 2021, the global supply chain has been interrupted due to the surge in demand from the manufacturing and warehousing industries, the stalling of transportation caused by regional blockades, and the surge in costs caused by the rising prices of raw materials and energy. All of these factors have caused a large backlog of orders for forklifts, while the lack of components and labor market constraints have led to a shortage of forklift trucks. Many front-line manufacturers have delivery dates of more than 6 months or even up to a year. This situation is directly reflected in the huge difference between the growth rates of shipments and orders in 2021 and the first half of 2022. Many forklifts truck suppliers report that their current backlog of orders will create high growth in shipments in 2022/2023, and the growth rate of sales will be even higher due to price increases.

After the second half of 2023, we expect shipment volumes will be higher than order volumes, and then gradually return to the normal state.

Many forklift truck suppliers stated that their current backlog of orders can ensure the growth of shipments in 2022/2023, and the growth rate of sales will be even higher due to price rises.

Annual Orders vs. Shipments from WITS (2013-2022E)

2020-2023 Order Growth By Country, Y/Y Change

In the next insight, we will focus on the trend towards electrification of forklift trucks.

For more information on the global forklift market, please contact Maya Xiao, Senior Analyst at Interact Analysis.

Posted in: Commercial Vehicles.