Discover how MHEDA members can navigate economic uncertainty by focusing on market trends, ROI, and efficiency-driven capital investments.
Economic growth continues in 2026, but the story beneath the headline numbers is far more complex. From technology and defense to housing and consumer spending, market conditions vary widely across sectors. Here are 10 key takeaways to help material handling business leaders understand the opportunities and challenges shaping the year ahead.
This information is a summary of the insights published in the Q3 MHEDA Economic Advisory Report, curated by ITR Economics and published on June 15, 2026. To access the full report, available FREE to all MHEDA Members, visit mheda.org/economic-advisory-report.
1. Economic growth is positive, but highly uneven.
The U.S. economy is expanding modestly in 2026, yet the benefits are not being shared equally across industries. Aggregate growth figures can be misleading because performance varies significantly by sector. Companies should focus less on broad economic indicators and more on the specific markets and customer segments they serve.
2. Technology and defense continue to outperform.
Technology-driven investment and defense spending remain among the strongest
sources of growth in the economy. Businesses that directly serve these sectors—
or provide products and services that support them—are benefiting from stronger demand and increased capital spending.
3. Consumer spending remains resilient but constrained.
Consumers continue to support economic growth, but spending is being limited by persistent inflation and slower real wage gains. While employment remains stable, purchasing power has not improved significantly, creating a more selective spending environment.
4. High interest rates are suppressing discretionary purchases.
Elevated borrowing costs are not only affecting consumers, they are also influencing how material handling customers evaluate capital projects, equipment purchases, facility investments and financing decisions. Essential operations and projects with a clear return on investment may continue to move forward, but discretionary upgrades or lower-priority purchases may face greater scrutiny.
5. Material handling demand is positioned for recovery, but risks remain.
Material handling equipment new orders are currently below year-ago levels, but the report forecasts recovery through 2028. That is an encouraging signal for the industry, but the expected rise may be supported in part by price increases rather than volume alone. Tariff concerns, interest rate headwinds, weak freight trends, elevated input costs and consumer pressures remain important risks. Members should prepare for opportunity without assuming every customer segment will recover at the same pace.
6. Customer investment is being driven by efficiency and productivity.
Capital spending is improving, but for many material handling customers, investment decisions are being driven less by expansion and more by the need to improve efficiency, manage labor challenges, increase throughput and protect margins. For MHEDA members, that can create opportunities across a wide range of solutions, including fleet optimization, storage and warehouse design, service support, rental flexibility, safety improvements, automation and other technologies that help customers do more with constrained resources.
7. Revenue growth does not always equal demand growth.
Inflation and pricing increases can make top-line sales appear stronger than underlying demand. Businesses should closely monitor unit volumes, order activity, and customer purchasing trends rather than relying solely on revenue growth as a measure of market strength.
8. Construction markets are moving in different directions.
Nonresidential construction is showing signs of recovery as lending conditions gradually improve, and private warehouse construction is expected to strengthen, though not return to 2022 boom conditions. Residential construction remains more challenged, with affordability concerns and high financing costs weighing on the market. Single-family housing is expected to remain weak, while multifamily construction could face additional pressure as rent growth slows and vacancy rates rise.
9. Cost pressures will continue to challenge margins.
Input costs remain elevated across energy, metals, plastics, fertilizers, and other critical materials. Although inflation is expected to be less severe than the surge experienced in the early 2020s, businesses should continue prioritizing cost control, operational efficiency, and supply chain management to protect profitability.
10. Strategic flexibility will be a competitive advantage.
The current environment rewards proactive decision-making. Companies should target higher-growth markets, expand recession resistant offerings where possible, and avoid over committing resources based on broad economic optimism. Organizations that remain agile, manage inventory carefully, and diversify their market exposure will be better positioned to succeed as economic divergence becomes more pronounced.
ARTICLE TAKEAWAYS
- Focus less on broad economic indicators. Keep your eye on your specific markets.
- Elevated borrowing costs are influencing spending decisions. Essential operations and projects with a clear ROI may continue, but discretionary upgrades may slow.
- Capital spending decisions are being driven by the need to improve efficiency. MHEDA members should look for opportunities in products and services that help customers do more with constrained resources.
