The global market for Material Handling Equipment is expected to decline by -11.1% in the year 2020 and thereafter recover and grow to reach US$171.1 billion by the year 2027, trailing a post COVID-19 CAGR of 4.5%. The pandemic is having a considerable impact on world economy and all industries. The asphyxiated economy has set into motion a cascading effect of a marked recession which is being felt by businesses and consumers alike. Global GDP is expected to dip into the red at -3% with the US economy shrinking by a shocking -5.9%. With roots in China, the world's supply chains are facing unprecedented disruption & shutdown. Interwoven with a demand crisis, the supply chain shocks are exerting a compounded blow to manufacturing companies worldwide. The worst affected industry in this pandemic driven crisis is manufacturing with its complex supply chains, labor intensive processes, and interdependencies. Division of labor, modular manufacturing strategies, outsourcing to reduce costs and increase the efficiency, consistency, and quality of each operations, have made the manufacturing sector most vulnerable amid the lockdown restrictions. An indication of the grim state of affairs is the fact that global manufacturing PMI is already declining and will fall to an estimated all-time low of 38.4 points in 2020 as compared to 53.8 in 2019. This indicates severe contraction of manufacturing activity including new orders, production, employment, supplier deliveries, inventories, customers' inventories, commodity prices, order backlog, new export orders, and imports. Global industrial output is plummeting sharply with the U.S posting steep declines of -16.5% & -15.2% in March & April 2020 .

Business investment confidence is tumbling amidst poor demand, falling profits, liquidity crunch and a reeling global economy. The "great lockdown" of 2020 has crushed the global economy and with it the manufacturing sector. The loss in consumer confidence and erosion of household wealth and discretionary spending will impact virtually every industry and business worldwide. Global merchandize trade is expected to plummet by 15% to 30% in the year 2020 highlighting the magnitude of disruption. Against this backdrop, it requires very little speculation to measure the impact on manufacturing. In the United States alone over 80% of manufacturers are bracing for losses. The impact will mean crunch on capital resources; workforce layoffs/reduction and loss in productivity; supply chain disruptions; difficulties with funding; and increase in cybersecurity risks and fraud. Unlike IT services where work is being carried out remotely via internet and cloud platforms, for the manufacturing industry, plant activities and production cannot be carried remotely and therefore remains worst affected. The slower economic activity means reduced demand for industrial and consumer goods and lower manufacturing orders. In the midst of this crisis, demand for advanced materials used in manufacturing is taking a heavy blow as cash strapped companies struggle to cope. With manufacturing industry collapsing like a pack of cards, materials in the value chain are facing the biggest business setback ever. Second wave of infections and still high unemployment rates are infusing uncertainty into the recovery timeline for consumer demand. Despite moves to reopen the economy, battered business confidence plummets to new depths & rampant CAPEX spending cuts continues threatening to lengthen the road to industrial recovery. Plant closures & liquidity issues are resulting in cancellation & postponement of production equipment upgrade and replacement. As companies brace for impact, the focus is shifting towards survival resulting in budget cuts for all immediate non-essential capital and operating expenditure. As production slips & plant capacity utilization rates declines, there is less critical need for slat band and belt conveyors used for automated or semi-automated packaging and processing functions.

In the post COVID-19 period, growth will be led by re-doubled focus on modernization and automation of manufacturing processes coupled with the need for transparency within the supply chain and more focus on flexible warehouse operations. The market will receive notable impetus from technological advancements, recovery in manufacturing activities in developing countries and growing investment to upgrade manufacturing units. Factors such as strong focus on automation, productivity and worker safety will play a paramount role in augmenting market growth. While increasing implementation of advanced control methodologies is likely to favorably change the market dynamics, the combination of material handling machinery with electronic intelligence is anticipated to positively change the market outlook. Future growth will also be led by increasing adoption of these systems across diverse industries and notable use of these platforms for automobile production. However, high initial investment along with maintenance costs remains one of the major barriers for the market growth. The expensive nature of material handling systems will make it difficult for small- to-medium-sized companies to deploy the machinery within their production and distribution units. In addition, a number of large companies are planning to cut costs by considering options like purchasing second-hand units, renting industrial trucks or acquiring systems on lease. Some of the other factors that will challenge growth include technical issues related to operation, concerns associated with integration of software and hardware components, and cyber security threats.