China Daily: Economic recovery drives rapid growth in sales of construction machinery

China Daily: Economic recovery drives rapid growth in sales of construction machinery

Strong demand for recovery, infrastructure projects boost profits

Industry experts say that due to the surge in demand brought about by the domestic economic recovery, China's construction machinery sales, especially excavator sales, achieved rapid growth from March to May.

According to data from the China Construction Machinery Industry Association, in May, the sales of excavators in China reached 31700 units, a year-on-year increase of 68%. The sales in March and April were 49400 and 45400 units, respectively, reaching new monthly highs and second highest levels.

"The rebound of excavator sales in March was unexpected, and the growth momentum continued in April. This shows that the construction machinery industry has stepped out of the haze of the COVID-19 and ushered in the peak season. A report from AVIC Securities said that the excavator sales in the whole year are expected to grow by 10% year on year.

Another report from Anxin Securities pointed out that at present, the construction machinery industry has developed in a positive direction, and the supply of various construction machinery is in short supply.

Due to the continuous increase of countercyclical policies, it is expected that infrastructure investment will continue to rise, which will further boost the industry.

On an assembly line in Qingdao, Shandong, workers are carrying out the final assembly of excavators. [Image/Xinhua News Agency]

Qi Jun, president of China Construction Machinery Industry Association, said that although many industries have been impacted by the COVID-19, China Railway Group Corporation's continuous railway construction and other national infrastructure projects will effectively support the sales of domestic construction machinery enterprises.

Qi Jun added that this will enable most construction machinery companies to achieve better sales in the second quarter of this year.

Construction machinery manufacturer Sany Heavy Industry stated that from January to April, the group's sales revenue and profit reached RMB 38.3 billion and RMB 6.4 billion respectively, slightly higher than the same period last year. It is estimated that the company's sales revenue in May increased by 40% year-on-year.

In the industrial zone of Sany Heavy Industry located in Changsha, Hunan, the assembly lines of various construction machinery have been operating at full capacity, and many orders have been scheduled for the second half of this year.

In the industrial zone of Lingang New Area in Shanghai Free Trade Zone, Sany excavators are being assembled at a speed of 1 unit every 5 minutes. Sany Heavy Industry reported that in April, the production and sales of excavators, pile drivers and other products reached 10342 units and 10994 units respectively, breaking monthly records.

According to data from Guangxi Liugong Machinery Co., Ltd., the group's total excavator production in April was 4500 units, three times that of the same period last year.

"At present, we are operating at full capacity," Huang Min, Vice President of Guangxi Liugong Co., Ltd., said in an interview with People's Daily. With the help of the digital industry chain platform, we have successfully found more than 1000 suppliers, achieved resource sharing of employees, raw materials, logistics, and other resources, and ensured the smooth progress of production.

Fang Jianxian, General Manager of China Road Machinery Network (lmjx. net), the official website of the Construction and Maintenance Machinery Branch of the China Construction Machinery Industry Association, said, "The rapid growth in excavator sales from March to May this year is attributed to the resumption of construction work, which has stimulated the demand for mechanical equipment. However, with the easing of the surge in demand, the growth rate of excavator sales in the second half of the year will slow down, expected to be between 10% and 15%."

Fang Jianxian said, "The reason behind the growth is that the government's tone of increasing infrastructure investment throughout the year will not change, and the updates of excavators brought about by environmental policies are also accelerating.".

"With the orderly recovery of various projects, the country will increase investment in traditional infrastructure construction, driving the continuous growth of market demand for construction machinery, especially earthwork machinery, lifting machinery, concrete machinery, high-altitude operation platforms, etc. In addition, with the gradual increase in new infrastructure, new infrastructure is expected to become a new driving force for China's economic growth, and the market demand for the construction machinery industry will continue to expand," he added. Author: Zheng Yiran