Affected by the epidemic situation, the rise of raw materials and other factors, the sales volume of excavators decreased significantly in April. Although the year-on-year decline narrowed, there was a significant decline month on month.
According to the statistics of 26 excavator manufacturing enterprises by China Construction Machinery Industry Association, 24534 excavators of all kinds were sold in April 2022, a year-on-year decrease of 47.3%; Among them, there were 16032 sets in China, a year-on-year decrease of 61%; 8502 sets were exported, with a year-on-year increase of 55.2%.
The industry expects that if the epidemic situation is gradually effectively controlled and the stagnant projects are started in an orderly manner, with a relatively low base in the same period last year, it is expected that the growth rate of excavator sales in the third quarter of this year is expected to become positive. With the continuous development of infrastructure investment, it will provide a stable growth power for the construction machinery industry.
The epidemic has dragged down demand
As a typical investment dependent and cyclical industry, China's mining machinery industry is facing many uncertainties, such as market cyclical adjustment, epidemic impact, intensified competition, rising prices of raw materials and bulk commodities, emission upgrading, superposition of complex international trade relations and so on.
According to the latest data, the year-on-year decline of excavator sales in April narrowed, and the year-on-year decline of all kinds of excavators sold by 26 excavator manufacturers narrowed by 5.8 percentage points compared with the previous month; Among them, the year-on-year decline in domestic sales narrowed by 2.6 percentage points. From the monthly sales data of domestic excavators, the sales volume of domestic excavators in April is still the second in the sales volume of a single month this year, but it is under the dual pressure of month on month decline in domestic and foreign sales, including 39.6% month on month decline in domestic sales and 19.3% month on month decline in exports.
Driven by the steady growth policy and accelerating the implementation, the centralized commencement activities of major engineering projects in many places were carried out in April, especially in Central South, southwest and Northeast China. According to incomplete statistics, the planned investment of key projects in April still maintained a high-speed growth year-on-year. However, due to the repeated epidemics in many places and the Limited Logistics and transportation, the phenomenon of insufficient effective commencement is more obvious, So as to drag down the sales of construction machinery.
In terms of classification, the sales volume of small excavation in the domestic market in April was 10696 units, a year-on-year decrease of 57%, 2.7 percentage points lower than that of the previous month; The sales volume of medium excavation was 3534 units, a year-on-year decrease of 69.8%, 2.2 percentage points lower than that of the previous month; The sales volume of large-scale excavation was 1802 units, a year-on-year decrease of 59.9%, 2.6 percentage points lower than that of the previous month.
Under the influence of the continuous rebound of this round of epidemic, the demand side is restrained. The downstream applications of excavators are concentrated in infrastructure, real estate, mining, rural areas and urbanization. Among them, infrastructure and real estate are the two major application fields of excavators.
Ge Xin said that generally speaking, large excavators are used in mining and large-scale infrastructure projects, medium-sized excavators are used in real estate, infrastructure and other engineering projects, and small excavators are mainly used in rural construction, house reconstruction, municipal and other projects. From the monthly breakdown data, the continuous recovery trend in the field of municipal construction represented by domestic small excavators was interrupted in April, while the recovery process in the field of infrastructure and real estate represented by medium and large excavators was significantly weaker than expected.
Soochow Securities believes that considering the rapid growth of exports and the decline of the base in the same period, it is expected that the year-on-year growth rate of the industry in the third quarter of 2022 is expected to be positive. Since the beginning of 2022, more than 60 cities have stabilized the real estate industry by reducing the qualification requirements for house purchase, reducing the down payment ratio, relaxing the loan requirements and reducing the mortgage interest rate. The construction machinery sector has a lot of early correction, and the two downstream margins of infrastructure and real estate have been improved. The valuation has room for repair.
Ge Xin analyzed the first finance and economics. At present, the construction machinery industry is under the pressure of double decline in sales at home and abroad, and under the pressure of high raw material costs, the profit level of listed construction machinery companies in the first quarter of this year has been significantly impacted, which will restrict the release of manufacturing steel demand of relevant construction machinery enterprises in the later period. However, with the continuous enhancement of infrastructure investment, it will provide a stable growth power for the construction machinery industry.
Infrastructure investment is expected to grow rapidly
Since the beginning of this year, infrastructure investment has played a "ballast" role in stabilizing economic growth due to the continuous overweight of stable growth policies at the national level. However, due to the repeated epidemic in many places, the intensification of conflicts between Russia and Ukraine, global inflation and the Federal Reserve's interest rate increase, the uncertainty and instability of China's economic operation environment have increased. In the face of complex and changeable economic downward pressure, the recovery of infrastructure investment is less than expected.
Following the emphasis on "comprehensively strengthening infrastructure construction" at the 11th meeting of the central financial and Economic Commission on April 26, the meeting of the Political Bureau of the CPC Central Committee held on April 29 once again released a positive signal: fully expand domestic demand, play the key role of effective investment, strengthen the guarantee of land, energy use and environmental assessment, and comprehensively strengthen infrastructure construction.
The two major conferences have continuously stressed and demanded that infrastructure investment be released as a "ballast" for economic growth and a clear signal to shoulder the "banner" of expanding domestic demand, promoting recycling and stabilizing growth. This also means that as an important starting point for stimulating investment in the next step, the commencement and construction of local infrastructure investment projects will enter an accelerated period.
Recently, major projects have been intensively started and landed. The Ministry of water resources recently held a special dispatching meeting to promote the commencement and construction of major water conservancy projects in 2022, emphasizing accelerating the commencement and construction of major water conservancy projects to ensure that more than 30 new projects will be started in 2022. According to the Ministry of water resources, the investment in water conservancy projects will be about 800 billion yuan in 2022. We will focus on promoting the preliminary work of 55 major water conservancy projects, implement the danger removal and reinforcement of more than 1700 dangerous reservoirs, and implement the continuous construction, supporting and modernization of about 570 large and medium-sized irrigation areas.
At the same time, the issuance of special bonds was accelerated to provide financial guarantee for infrastructure investment. In the first four months of this year, local governments have issued about 1.35 trillion yuan of new special bonds, an increase of about 1.12 trillion yuan over the same period last year. In the field of investment, it is also more inclined to the field of infrastructure. In April this year, the funds raised by local bonds were mainly used for other special infrastructure. Compared with the same period last year, the proportion of other special infrastructure has increased significantly, and it is expected to further maintain a high proportion in the future.
Zhu Haibin, chief economist of JPMorgan Chase China, told China business that recently, several central high-level meetings have stressed the need to focus on major infrastructure projects to ensure that this year's economy is still within the expected target range. This means that both traditional infrastructure projects such as farmland and water conservancy and new infrastructure projects related to economic structure transformation such as information and technology will increase financial investment. The growth rate of infrastructure investment this year increased from 2% ~ 3% at the beginning of the year to 8% ~ 10%.
Cheng Shi, chief economist of ICBC international, also believes that although the epidemic factors make the landing of some infrastructure projects slow and the actual infrastructure investment is difficult to recover in the short term, he is still optimistic about the growth rate of infrastructure investment. If the epidemic situation is further controlled, the implementation of infrastructure projects will be gradually accelerated, and the subsequent orders of infrastructure enterprises may increase significantly from May to June. The growth rate of infrastructure this year is expected to achieve an average growth level of 7.5%.
