Infrastructure Rebound Weak in First Half; Overseas and Western Markets Become Industry Focus

2013-10-10 633 0人评论
             Monitoring data from the Forward Industry Research Institute show that in the first half of 2013, China's sales of excavators, loaders and bulldozers fell 12.3%, 4.5% and 7.3% year on year respectively, with the declines narrowing, while roller sales rose 9.1% year on year, with the growth rate continuing to expand. The main reason the development situation of China's construction machinery industry remained unpromising in the first half of 2013 was that the rebound in infrastructure investment growth was not obvious. The reason behind this was that in the first half of 2013, local government fiscal revenue growth remained at a low level, and fiscal expenditure also showed negative growth. The central government's audit of local government debt and control of financial risks led to a sharp fall in the scale of urban investment bond issuance. Although the growth rate of newly started floor area in real estate construction rebounded significantly, its pull on demand for construction machinery was not large.

  In the first half of 2013, China's land transfer revenue grew rapidly, but the area of land transferred was in negative growth, from which it can be foreseen that the demand pull from future newly started real estate floor area on construction machinery will be limited; on the other hand, fiscal policy will still find it difficult to make a difference in the second half of the year; in the second half of the year, fiscal subsidy funds will be in short supply, control of local government debt risks will continue to ferment, and the infrastructure investment situation will not be optimistic. The construction machinery industry research team of the Forward Industry Research Institute believes that in the second half of 2013, due to the large social inventory of construction machinery, demand for new machines will remain sluggish.

  Amid the difficulties of the entire construction machinery industry, "expanding overseas" and "developing toward western China" are usually topics discussed by industry insiders. Monitoring data from the Forward Industry Research Institute show that in the first half of 2013, exports of complete construction machinery units rose 1.76% year on year, while exports of parts and components fell 61.36% year on year; high-speed growth in exports of tyre-mounted self-propelled cranes, dredgers, all-terrain cranes of more than 100 tons and crawler excavators ensured the growth of complete-unit exports. This shows that China's high-tech special equipment in the construction machinery industry is gradually being accepted abroad, and that technological upgrading within the industry has become a consensus, laying a good foundation for China's construction machinery to participate in international competition. The "expanding overseas" strategy, as a long-term development strategy for China's construction machinery industry, is relatively wise, but its help in getting the industry out of difficulties in the short term is limited, because the situation in which Chinese construction machinery enterprises' exports "emphasize complete machines and neglect parts" will be difficult to change in the short term. As for the "developing toward western China" strategy, the construction machinery industry research team of the Forward Industry Research Institute believes that this strategy is also of limited help in getting China's construction machinery out of difficulties. The following chart is a matrix chart of the fixed asset investment share and average growth rate of 31 regions in mainland China from 2010 to 2012. It can be seen that the most attractive markets are still in East China regions such as Jiangsu, Shandong and Zhejiang. The average growth rates in Sichuan, Chengdu and Yunnan are relatively low; the investment scale in Qinghai, Ningxia, Gansu and Xinjiang is relatively small, making them markets to enter at an opportune time, with limited help in the short term.


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