Industry insiders know that the construction machinery industry has strong periodicity and seasonality. But when was the last round of trough and the current round of peak? How long is the current downturn and where is it expected to go next? Similarly, how many months is the seasonal peak in a year? What month is the trough? What are the differences between different products? If the cyclical peak and seasonal trough are superimposed, or the cyclical trough and seasonal peak are superimposed, how can we analyze the industry trend?
Take the sales data of excavator industry as the research object.
There are many kinds of construction machinery products. Excavators are widely used, with large sales volume, leading and representative products. This paper selects the 13-year industry excavator sales data from January 2009 to January 2022 as the research object to analyze the periodicity and seasonality of construction machinery. The data comes from the information publicly released by the industry.
The industry has the characteristics of seasonality, periodicity and trend.
According to the analysis of the monthly sales trend of excavators in the industry from January 2009 to January 2022 (Figure 1), the operation and development of the industry has three characteristics: in the short term, the sales volume in March is significantly higher than that in other months, the data for many consecutive years show multiple sharp peaks, and the industry has obvious sawtooth seasonal characteristics. In the medium term, two peaks and one trough have been formed in the last 13 years, similar to M-shape. The first peak is in the first quarter of 2011, the first trough is in the fourth quarter of 2015, and the second peak is in the fourth quarter of 2020. The interval between the two peaks is about 10 years. The operation and development law of construction machinery is more in line with the zhugra cycle theory, and the industry has the characteristics of wavy economic cycle. In the long run, the second wave peak is higher than the first wave peak as a whole, and the industry has a long-term trend of upward development and growth.
Seasonal decomposition of data is an effective method for industry analysis.
Like many time series data, the sales volume data of excavator industry is composed of four variables: long-term trend, cycle, seasonal law and random fluctuation. In the real world and the corresponding original data, these four variables are intertwined and superimposed, which brings trouble to industry analysis.
In order to accurately analyze the rules of the industry, the data analysis method is applied to decompose the time series data of sales volume in the excavator industry seasonally. After the decomposition of time series data, three independent variables are generated. One is the combined variable of long-term trend and cycle, which is called trend sales volume. The sum of trend sales volume in a year is equal to the sum of actual sales volume in the same year, but the monthly trend sales volume is different from the original actual sales volume. This trend sales volume has nothing to do with seasonal characteristics and is related to the periodicity and long-term trend of the industry. The second is the seasonal law of industry demand, which is called seasonal factor. The seasonal factors in the same month in different years are the same, and the seasonal factors in different months in the same year are different. The seasonal factor data value in the peak months of demand is large, while the seasonal factor value in the low months of demand is small. The average value of seasonal factor in 12 months of a year is 1. The third is random fluctuation. The random fluctuation values are almost different every month, but the average value of multiple random fluctuation variables is infinitely close to 1. In practical analysis, random fluctuations are generally not considered. When these three variables are combined (multiplied), they are equal to the actual sales volume of each month
December 2020 entered a downward cycle and rebounded slightly in the last three months.
The trend sales volume of excavator industry after seasonal decomposition is shown in Figure 2. Through this figure, we can judge intuitively and accurately:
The last peak was in February 2011, the trough was in October 2015, and the current peak was in November 2020. The two peaks were separated by 9 years and 9 months (9.8 years). From December 2020, the construction machinery industry has turned into a downward cycle. So far, it has been one year and two months. Of course, the excavator industry is pioneering, and the inflection point of most other product cycles lags behind that of excavators by 1-6 months.
It can be seen from the trend sales trend chart that in the first quarter of 2020 and around, due to the impact of the epidemic, the trend sales of the industry had an obvious "depression", forming a small trough, and then super compensation rebounded and rose rapidly. It reached its peak from November 2020 and began to decline sharply in December 2020. In the last three months, i.e. from November 2021, the industry trend sales rebounded slightly.
January is the seasonal trough of sales and March is the seasonal peak.
According to the broken line chart of seasonal factors (Figure 3), the demand for excavators is at a seasonal low in January every year, and its sales volume is 59% of the monthly average of annual sales; Then the sales volume rose vertically, reaching the peak in March, and its sales volume was 239% of the annual monthly average; Since then, sales have fallen rapidly, reaching another trough in July, with sales of 65% of the average. It grew slowly in the second half of the year. By December, sales recovered to 87% of the average value. As a result of data analysis, seasonal factor can be used as a reference basis for annual production scheduling of enterprises.
There is still some time before the next upward turning point of the cycle.
The demand trend of construction machinery is influenced by many factors, such as the political and economic factors such as state policies and macro economy, electrification and intellectualization, and the social factors such as COVID-19 and labor shortage. From the historical data, the construction machinery industry is in good agreement with the zugra cycle theory. From the reality, the days of rapid growth of real estate are gone forever; The peak of China's highway and railway construction has passed, and the infrastructure is difficult to support; The peak of equipment obsolescence and renewal in the industry has passed. If the development of construction machinery in the next 5-10 years basically conforms to the zugra cycle theory, the warming trace in the last three months is only a periodic oversold rebound. It is expected that the next trough of the industry will be around July 2025, that is, the industry is still more than three years away from the trough.
Influenced by social factors such as state policies and macro-economic factors, such as political and economic factors, electrification and intellectualization, and the social factors such as COVID-19 and labor shortage, there are also inherent fixed rules, such as elimination and renewal of service life. From the historical data, the construction machinery industry is in good agreement with the zugra cycle theory. From the reality, the days of rapid growth of real estate are gone forever; The peak of China's highway and railway construction has passed, and the infrastructure is difficult to support; The peak of equipment obsolescence and renewal in the industry has passed. If the development of construction machinery in the next 5-10 years basically conforms to the zugra cycle theory, the warming trace in the last three months is only a periodic oversold rebound. It is expected that the next trough of the industry will be around July 2025, that is, the industry is still more than three years away from the trough.
