Chinese Construction Machinery Industry Shows Resilient Domestic Demand and Rebounding Exports

Chinese Construction Machinery Industry Shows Resilient Domestic Demand and Rebounding Exports

The Chinese construction machinery industry is witnessing a robust recovery in both domestic and export markets, as demonstrated by recent sales figures from major manufacturers. According to the China Construction Machinery Industry Association, in August 2024, sales of excavators by leading manufacturers reached 14,647 units, marking a year-on-year increase of 11.8%. Domestic sales accounted for 6,694 units, up by 18.1%, while exports grew by 6.95% to 7,953 units. During the same period, sales of loaders also experienced significant growth, with a total of 8,329 units sold, a year-on-year increase of 15.2%. Domestic loader sales reached 4,036 units, up by 8.99%, while exports surged by 21.8%, totaling 4,293 units.

This growth in both sectors reflects the resilience of domestic demand and a promising rebound in exports. Excavator sales, which saw a year-on-year increase of 11.8% in August, marked the fifth consecutive month of positive growth. Notably, domestic excavator sales have shown positive year-on-year growth for six consecutive months, rising by 18.1% in August. Despite a slight contraction in the growth rate compared to the previous month, export sales rebounded after 14 months of negative growth, increasing by 6.95%. Furthermore, month-on-month figures for excavator sales show a 7.0% rise, reversing the downward trend of recent months, with domestic sales climbing by 7.4% and export sales up by 6.7%.

Similarly, loader sales continued their upward trend, with August marking the fifth consecutive month of year-on-year growth. While the overall growth rate of 15.2% in August was lower than the previous month’s 11.9% increase, domestic sales still rose by 8.99%, marking five months of consecutive positive growth. Export sales of loaders showed a particularly strong performance, growing by 21.8%, marking six consecutive months of growth. However, loader sales saw a slight 0.6% decline month-on-month, with domestic sales down by 9.1%, while export sales increased by 9.0%.

The August sales data also reveals changes in the proportion of exports for both excavators and loaders. For excavators, the export share fell to 54.3%, while for loaders, the export share rose to 51.5%. This indicates a strong rebound in foreign demand, coupled with resilient domestic sales, further underlining the theme of "resilient domestic demand and rebounding exports" in the construction machinery industry.

On the demand side, infrastructure and real estate remain the primary downstream markets for construction machinery. While infrastructure projects have seen a marked increase in activity since the beginning of the year, funding issues continue to pose challenges to the progress of these projects. As of September 8, 2024, China had issued a total of ¥54.339 trillion in local government bonds, with ¥25.654 trillion in new special bonds issued. The peak issuance of special bonds in August has provided much-needed funding for infrastructure projects, supporting the “Golden September” period of new project starts.

The real estate market, while still under pressure, has shown signs of stabilization. Key indicators, such as the sales area of newly built commercial housing, have seen narrowing declines compared to earlier in the year, reflecting the impact of policy measures aimed at stabilizing the sector. However, real estate remains in a period of adjustment, and the effects of these policies are still unfolding.

In conclusion, while the construction machinery industry is experiencing strong momentum, challenges such as slow project implementation and ongoing real estate market adjustments continue to affect the pace of recovery. However, as local equipment update policies take effect, the industry is well-positioned for further growth in the coming months.