The material handling industry has been growing at a consistent pace for many years. As other industries grow, the material handling industry grows as a result to supplement that growth; it is the pillar on which supply chains stand. Furthermore, the soaring penetration of advanced technologies such as RFID (Radio Frequency Identification), IoT (Internet of Things), big data, and data cloud storage in 3PL, food & retail, and e-commerce industries is driving the material handling equipment market growth more than ever before. In this article, we will discuss the economic impact of the material handling industry.
Impact on GDP
According to a report by MHI, the economic contribution of the material handling industry in 2018 amounted to around $173.2 billion in the GDP of the USA. Of the total contribution of $173.2 billion to GDP in 2018, around $125.5 billion was from supply chain and consumer spending activities. This extends the benefits of the industry to other sectors of the U.S. economy, including $23.9 billion in financial activities; $8.5 billion in education and health services; and $5.3 billion in leisure and hospitality. Other than that, the industry contributed around $39.3 billion in taxes to local, state and federal governments.
And the industry is growing at a steadfast pace around the world. According to a report by Fortune Business Insights, the global material handling equipment market size was roughly USD 194.73 billion in 2018 and is expected to expand at a CAGR of 7.8% over the period from 2019 to 2026, reaching ISD 354.03 billion by 2026. This means there is a huge scope of growth in this industry, not just for market players but also for the people employed in it.
Impact on employment
Overall, the material handling industry supported nearly 1.6 million jobs in 2018. Material handling companies directly employ more than 400,000 employees in manufacturing, rental, and leasing, as well as information and software services, among others. Additionally, for each worker directly employed by the material handling industry, an additional 2.9 jobs are supported in the wider economy, either in the supply chains of material handling companies or through the wage spending of those employed by the firms themselves or their supply chains.
The workers employed in the material handling industry have an annual income of $73,900 on average, which is higher than the average income in many states and industries.
Impact on other industries
The material handling industry mainly caters to automotive, food and beverages, chemical, semiconductor and electronics, e-commerce, aviation, pharmaceuticals, among others. Out of these industries, the e-commerce segment held the largest market share exceeding 15% in terms of revenue in 2018 and is anticipated to expand at the highest CAGR of over 8% in the period from 2019 to 2025. Other industries with high growth also result in a surge in the demand for material handling equipment and systems.
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