Construction machinery industry looks to build on strong year

11 January 2019 12:28 China Desk

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. .

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