The construction machinery sector continues to strengthen, with high certainty of growth in the second quarter

The construction machinery sector continues to strengthen, with high certainty of growth in the second quarter

Recently, multiple construction machinery companies such as Sany Heavy Industry, Zoomlion Heavy Industry, XCMG, and Liugong have started raising prices for their products, including pumps, excavators, cranes, and other products. On April 2nd, Zoomlion Heavy Industry raised prices for pumps by 5% and 10% respectively; On April 9th, Sany Heavy Industry's pump truck prices were also comprehensively increased by 5% -10%; On April 11th, Sany Heavy Industry raised the prices of small excavators by 10% and medium to large excavators by 5%; Liugong recently announced a price increase of 3000-10000 yuan for loaders, and a 5% -10% increase in prices for truck cranes and excavators; Shanhe Intelligence also announced a 5% -10% price increase for its entire series of excavators.

The price increase of construction machinery may be due to an increase in production and component supply costs during the epidemic period, while the more important reason is a significant increase in the operating rate of infrastructure projects in various regions and a rebound in market demand.

Due to the COVID-19 pandemic this year, the main engine factories started construction relatively late, affecting the early stage of stocking. There are production capacity bottlenecks in multiple links such as production capacity and component supply. Currently, there is a supply gap in the industry, and there has been a shortage of goods. Against this background, several major main engine factories have recently issued product price increase notices, and will raise product sales prices in the future. In the face of difficulties, enterprises also need to "revive".

The short-term epidemic has had a significant impact on the domestic economy, and the policy will increase the intensity of countercyclical regulation. The construction machinery sector will significantly benefit from an increase in infrastructure investment, and the growth certainty of the sector in the second quarter is high. On March 27, the meeting of the Political Bureau of the CPC Central Committee pointed out that the proactive fiscal policy should be more active and promising, and specifically mentioned that the fiscal deficit rate would be appropriately increased, special treasury bond would be issued, and the scale of special bonds of local governments would be increased, which provided sufficient capital ammunition for subsequent infrastructure projects.

As of the end of the first quarter, a total of 1082.9 billion yuan of newly issued special bonds had been issued nationwide, with a significant increase in issuance progress. It was also clarified that special bonds should not be used for land storage and real estate, and investment in infrastructure will maintain a high proportion.