Strong construction growth in China

Sales of construction equipment in China will exceed 325,000 units this year, according to data from Off-Highway Research’s Chinese Service. This 30% growth will follow on from the extraordinary 81% increase in demand seen in 2017.

The excavator and wheeled loader sectors are the main drivers, and sales growth has been particularly brisk in the first half of the year.

Wheeled loaders have traditionally been the highest volume machines in China, but last year crawler excavators outsold them for the first time.

That gap is expected to widen further this year, with nearly 140,000 crawler excavator sales against 83,000 wheeled loaders. This year is also seeing strong growth for crawler dozer, mini excavator and mobile crane sales in China.

New infrastructure projects which were launched in 2016 and 2017 are the key drivers for growth, many of which fall under the auspices of the government’s ‘One Belt, One Road’ initiative. The real estate market has also been a positive influence on equipment sales.

However, with infrastructure investment now slowing, the equipment market is expected to fall back in 2019. Despite this, equipment volumes are expected to remain reasonable – certainly above the deep lows of 2015 and 2016.

The government’s focus on curbing overheating investment in the infrastructure segment should prevent a repeat of the devastating boom and bust cycle which was seen following the stimulus-driven surge in sales from 2009-2011.

Off-Highway Research’s updated forecasts for the Chinese construction equipment market are available - subscribers can click here to log in. The report can also be bought by non-subscribers. Contact [email protected] for more details.