What has affected the recovery of the construction machinery industry?
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The recovery of the construction machinery industry has been discussed for a long time, but it does not seem to have particularly good results. For some companies, positive growth has been achieved in the first half of the year. However, in the second half of the year, whether the construction machinery industry can resume growth will still be plagued by many problems.
First of all, from the perspective of the consumption cycle, the ratio of sales of construction machinery in the second half of the year to the first half is approximately 2:3. However, in the third quarter, it was the traditional off-season of construction machinery. During this period, the proportion of annual sales was also slightly reduced due to the decrease in sales volume. And even if sales are no better in the second half of the year, due to the drag in the first half of the year, the situation in the year is not optimistic.
Second, in the vast majority of enterprises in China, exports have become an indispensable part. Affected by the financial crisis, the demand for construction machinery products in the international market continued to slump, which led to the rapid growth of China’s export of construction machinery that has continued for many years. The export of construction machinery currently accounts for only a little over 10% of the total industry revenue. For the forklifts and bulldozers whose exports account for a greater proportion of total sales, the degree of impact will be greater.
Second, raw material prices are high. As of early August, steel prices have risen for 16 consecutive weeks and are at high levels. At present, iron ore negotiations are gradually coming to an end. Japan, South Korea, and other countries have already proposed a 33% price cut, but this has not yet reached the expectations of Chinese companies. If Chinese steel mills only accept this price cut, because China's construction machinery companies have just got rid of high-priced steel stocks soon, this will again bring greater cost pressure on the company.
Finally, the main driving force for the development of the construction machinery industry this year is the acceleration of real estate investment and the continued investment in infrastructure. In the second half of the year, whether the two investments can maintain their expected status is still unknown. If this part of the market is weakened, the prospects for the construction machinery industry are not optimistic.
Although there are statistics showing that the industry situation has started to improve, the above issues are still fundamental to the industry's ability to truly achieve growth. Faced with the existence of these problems, companies can respond with the right direction.