On May 22, the third session of the 13th National People's Congress was held in Beijing. The Premier of the State Council released the "Government Work Report" (hereinafter referred to as the "Report"). Although the report did not mention the annual economic growth target, it proposed that the deficit rate for this year should be based on More than 3.6% arrangements, the issuance of 1 trillion yuan of special anti-epidemic government bonds, plans to arrange local government special bonds 3.75 trillion yuan, while increasing the proportion of special bonds available for project capital. On the one hand, the resumption of production and production is in full swing, and on the other hand, there are good signals from the two parties. What is the next step of construction machinery?
Infrastructure is still the main reason to support the prosperity of the industry
First of all, from the start time data that better reflects the construction needs, the average working time of the excavator in April was about 159 hours (higher than each month in 2019). The western region maintained a relatively high level, and the remaining regions have grown significantly. Among them, the growth rate in Hubei area reached 172%, and the growth rate in Jiangxi, Hebei and Zhejiang areas was 84%, 61% and 39% respectively. The operating rate soared all the way, and the downstream construction demand was obvious.
At the same time, the national level has also adopted a series of measures to boost infrastructure investment. On May 18, the CPC Central Committee and the State Council issued the "Guiding Opinions on Promoting the Development of the Western Region in the New Era and Forming a New Pattern", stating that the country will build a number of oil and gas production bases in the west.
On May 21, the Ministry of Transport stated that a new project library has been formed on the basis of existing projects. The new project library has more than 800 billion yuan in new investment.
On May 22, Premier Li Keqiang’s government work report stated that there is no economic growth target this year, but from the perspective of stabilizing the economy, it focuses on supporting the construction of “two new and one heavy”, that is, new infrastructure construction, new urbanization construction, transportation, Construction of major projects such as water conservancy.
On May 22, the 2020 budget report submitted to the National People's Congress audit showed that the central government injected 50 billion yuan into China National Railway Group, supported the issuance of 50 billion yuan in railway construction bonds for capital, and increased the cost of high-speed railways and intercity railways along the coast. And the construction of high-speed railway projects along the river.
A series of national initiatives are expected to further boost the confidence of the industry, and the construction machinery industry may usher in counter-trend growth.
Special debt investment has been steadily improved towards infrastructure, and the certainty of the high boom of construction machinery has increased
The "Report" mentioned that this year it plans to arrange 3.75 trillion yuan for local government special bonds, an increase of 1.6 trillion yuan over last year. Among them, the proportion of special bonds that can be used as capital for major projects has increased, from 20% in 2019. To 25%. From the perspective of investment in special bonds, the proportion of special bonds invested in infrastructure increased this year: Of the 1.1 trillion local special bonds issued in the first quarter of 2020, the proportion invested in infrastructure was as high as 85%.
In addition, the "Report" mentions that this year's deficit rate is planned to be more than 3.6%. The fiscal deficit scale will increase by 1 trillion yuan from last year. At the same time, 1 trillion yuan of special anti-epidemic government bonds will be issued, and 2 trillion yuan will be transferred to local governments. According to the calculation of 10-12% of the proportion of fiscal expenditure in the capital investment budget for 2015-2019, the increase in the 2 trillion fiscal deficit will lead to an increase of 100-120 billion in infrastructure investment.
The excavator market is hot, the national series of measures have boosted infrastructure investment, and the specific investment in special bonds has been increased to the certainty of the infrastructure. The construction machinery industry may usher in another wave of upsurge!
