In 2022, my country's economic activities will choose to make concessions in the balance of "epidemic prevention and development", and the downward cycle pressure of the construction machinery industry will intensify. According to data released by the China Construction Machinery Industry Association, the market situation from January to October 2022 has fallen to the level of around 2019, a drop of 29.2%, and the country continues to show a low-level operation, and construction and sales activities are not as expected.
As the end of the year approaches, various sessions in the industry pay particular attention to the development trend of the industry in the fourth quarter and 2023. Recently, major securities firms have released national macroeconomic outlooks and analysis of industry development trends, generally pointing to infrastructure, globalization, and new energy development. Let’s take a look at them in detail below.
The pulling effect of infrastructure construction will be manifested soon
As far as the overall economic environment is concerned, this year's macro situation provides a wealth of structural clues for the market. The report of the 20th National Congress of the Communist Party of China also pointed out: "Insist on economic construction as the center" and "By 2035...per capita GDP...reaches the level of moderately developed countries", which means that development is still placed As a priority, it is expected that the two sessions next year will propose economic growth goals that are in line with the long-term vision and short-term reality. However, taking the real estate industry as an example, the overall judgment of various securities companies on the real estate situation next year is that the risk of various data continuing to fall off a cliff is not great, but there is also a lack of motivation for significant improvement. The overall performance is a weak recovery in year-on-year readings under a low base.
Looking at the level of infrastructure construction, the views of the major brokerages are mostly the same, and almost all believe that "infrastructure construction" will be the highlight of the second half of the year and next year. Although the negative growth of the new real estate construction area for two consecutive years has greatly reduced the new demand for construction machinery. However, it is believed that with the advancement of the rhythm, infrastructure will be a strong support for the development of the construction machinery industry.
Since the 11th meeting of the Central Finance and Economics Committee studied the issue of "comprehensively strengthening infrastructure construction" in April this year, the positioning of infrastructure has been further promoted to the "solid foundation" of "comprehensively building a socialist modern country", which has become a stable foundation for the construction machinery industry. An important driver of growth.
Looking at the level of infrastructure construction, the views of the major brokerages are mostly the same, and almost all believe that "infrastructure construction" will be the highlight of the second half of the year and next year. Although the negative growth of the new real estate construction area for two consecutive years has greatly reduced the new demand for construction machinery. However, it is believed that with the advancement of the rhythm, infrastructure will be a strong support for the development of the construction machinery industry.
Since the 11th meeting of the Central Finance and Economics Committee studied the issue of "comprehensively strengthening infrastructure construction" in April this year, the positioning of infrastructure has been further promoted to the "solid foundation" of "comprehensively building a socialist modern country", which has become a stable foundation for the construction machinery industry. An important driver of growth. According to the policy, investment in transportation increased by 2.1%, an increase of 3.3 percentage points from June; investment in water conservancy increased by 25.8%, an increase of 10.7 percentage points from June; investment in ecological and environmental protection increased by 22.3%, an increase of 10.2 percentage points from June; Industry business activity rebounded 2.6 percentage points to 59.2% in July, which has risen to the highest level since September last year...
In general, with the systematic improvement of the Party Central Committee's positioning of infrastructure construction, the expansion of its project reserve field and the diversification of funding sources are expected to drive a systematic increase in the investment growth center in the next stage. At the same time, the counter-cyclical nature of infrastructure investment is still there. If the improvement of the epidemic situation next year drives the recovery of endogenous economic forces such as consumption, the pace of capital investment and project promotion may slow down accordingly; otherwise, it will become the key to stabilizing domestic demand. . For 2023, major brokerages have also given forecasts, and infrastructure investment is likely to present two characteristics. On the one hand, as a policy tool that can be directly controlled by the state's finances, especially when traditional infrastructure still occupies a relatively high proportion, the growth rate of infrastructure still has a counter-cyclical attribute and will complement the endogenous momentum of the economy. On the other hand, compared with the low growth rate of infrastructure construction between 2018 and 2021, which continued to operate at a low level of 0-4%, the important role of infrastructure construction in the future is to build a modern infrastructure system and lay a solid foundation for the comprehensive construction of a modern socialist country. The growth center may rise systematically.
Then, under the support of this series of intensive construction projects, the pulling effect of infrastructure construction is bound to be manifested.
Globalization will promote weakening cyclicality
Looking back on the first half of the year, China's construction machinery industry achieved overseas revenue of 42.51 billion, a year-on-year increase of 71.5%, and export sales accounted for 30.3%, which buffered the cyclical impact of the industry to a certain extent.
In fact, overseas markets have become the main battlefield for construction machinery in recent years. According to the statistics of UK KHL, in 2021, XCMG (Group), Sany, and Zoomlion will have a comprehensive market share of 7.9%/7.5%/4.9% in all categories of construction machinery, and their global ranking will rise to 3-5. At the same time, Off-Highway Research data also shows that in 2020, Sany won the global excavator sales champion for the first time in 2020, with a market share of 15% in single category. Competitiveness has increased significantly.
At the same time, under the background of globalization and "dual carbon", electrified products have strengthened demand resilience, and the trend of construction machinery electrification has become more and more obvious. Global leading OEMs are stockpiling electrified products. It is predicted that with the improvement of the electrification boom, it is expected that construction machinery electrification products will be launched in batches in 2023, and the first sales peak will be ushered in 2025.
Along with the layout of electrification, the development of intelligence is gradually spreading in the industry. Among them, Sany's "Lighthouse Factory" is a typical representative. The intelligent construction of domestic construction machinery is leading the world. After reaching production capacity, the production capacity will increase by 70%, which will further promote the process of globalization and become the focus of future development of the industry. Under the urging of the market, construction machinery will then develop towards the requirements of autonomy and high-end, further pulling the main battlefield to overseas markets, weakening the industry cycle, and innovative research and development will also become a powerful driving force for development.
