What’s new: China’s sales of excavators soared 51.3% in the first eight months this year to 20,939 units, boosted by an infrastructure boom the government is relying on to revive an economic slowdown caused by the Covid-19 pandemic.
The total of excavator sales in the first eight months is already close to 90% of sales for the whole of 2019, according to the China Construction Machinery Association.
The upward trend is expected to continue through the year. Chinese heavy equipment giant
Sany Heavy Industry Co. Ltd. is confident of maintaining stable sales growth in the second half, the company’s Secretary of the Board Xiao Youliang said at an investor-day event Tuesday.
In the first half of this year, Sany’s excavating machinery, concrete machinery, lifting machinery and other heavy equipment posted strong growth, driven by infrastructure demand and growth in equipment upgrades, Xiao said.
The background: Excavator sales are often seen as a leading indicator of investment as the equipment is widely used in construction from roads to housing. China has poured out trillions of yuan in fiscal stimulus this year, aiming to promote economic growth through investment in infrastructure.
In the government work report released in May, the government for the first time brought up the idea of “two new and one major,” meaning the construction of new infrastructure, new urbanization projects and major transportation and water projects.
Local government special purpose bonds are an important source of infrastructure construction funding. As of Aug. 16, local governments issued 2.56 trillion yuan ($374.6 billion) of new special bonds, an increase of 51% from the same period last year.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)
