Con­struc­tion ma­chin­ery in­dus­try looks to build on strong year

China Daily (Hong Kong) - - BUSINESS - By JING SHUIYU jing­[email protected]­nadaily.com.cn

China’s con­struc­tion ma­chin­ery in­dus­try is ex­pected to in­crease at a slower and more sta­ble pace in 2019, fol­low­ing some strong sales last year, an­a­lysts said.

The words came as lat­est data showed that sales by China’s 25 lead­ing ex­ca­va­tor man­u­fac­tur­ers surged 45 per­cent year-on-year in 2018. Ex­ca­va­tors, a ma­jor type of con­struc­tion ma­chine, are a key in­di­ca­tor of the in­dus­try’s ro­bust­ness.

Be­tween Jan­uary and De­cem­ber, a to­tal of 184,190 ex­ca­va­tors were sold in the do­mes­tic mar­ket, up 41.1 per­cent from a year ear­lier, while over­seas sales rose 97.5 per­cent to 19,100 ma­chines, data from China Con­struc­tion Ma­chin­ery As­so­ci­a­tion showed.

Lyu Ying, deputy sec­re­tary-gen­eral of China Con­struc­tion Ma­chin­ery As­so­ci­a­tion, said the con­struc­tion ma­chin­ery in­dus­try would main­tain its mo­men­tum this year.

The main driv­ers will be a de­mand for re­plac­ing ma­chines, fa­vor­able poli­cies and clients’ need to pur­chase high-tech prod­ucts, Lyu said.

Given the prospects for sta­ble eco­nomic ex­pan­sion, Lyu es­ti­mated that sales of con­struc­tion ma­chin­ery in China would grow 10 per­cent year-on-year in 2018, slower than the pre­vi­ous year.

Liu Jun, a se­nior an­a­lyst with North­east Se­cu­ri­ties, said the sec­tor would show strong re­silience in the fu­ture, as the govern­ment has be­gun to fur­ther boost do­mes­tic de­mand.

China’s con­struc­tion ma­chin­ery sec­tor be­gan its re­cov­ery in 2016, af­ter dip­ping through a four-year re­ces­sion. Sales by China’s main ex­ca­va­tor man­u­fac­tur­ers al­most dou­bled in 2017. How­ever, af­ter about two years of fast-pace ex­pan­sion, the in­dus­try’s growth rate slowed down in China, as the global mar­ket re­turned to mod­er­ate growth.

Thomas Pel­lette, group pres­i­dent for con­struc­tion in­dus­tries at United States-based Cater­pil­lar Inc, said though the growth pace had slack­ened off in re­cent months, he is hope­ful. “We ex­pect to see growth in 2019,” he said.

As for the Chi­nese mar­ket, Chen Qi­hua, chair­man of Cater­pil­lar China, held a “cau­tiously op­ti­mistic” at­ti­tude to­ward the in­dus­try’s fu­ture devel­op­ment. Chen said the ex­ca­va­tor sec­tor is ex­pected to re­main sta­ble this year.

Con­struc­tion ma­chine sales are con­sid­ered an in­di­ca­tor of the vi­tal­ity of a coun­try’s eco­nomic ac­tiv­ity, as grow­ing de­mand for the sec­tor is usu­ally backed by boom­ing min­ing and in­fra­struc­ture devel­op­ment.

China will keep its eco­nomic growth in 2019 within a rea­son­able range, State-owned me­dia Xinhua News Agency re­ported, cit­ing a top-pro­file meet­ing. The govern­ment will fur­ther sta­bi­lize em­ploy­ment, the fi­nan­cial sec­tor, for­eign trade, in­vest­ment and mar­ket ex­pec­ta­tions, it said.

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