Chinese construction equipment market continues to grow

09 May 2008

Demand for construction machinery in China is projected to increase +12.7% per annum through 2011 to CNY 181 billion (US$ 25.9 billion), outpacing gains in most other regions of the world, according to Construction Machinery in China, a new study by the US-based Freedonia Group.

Growth, said the report, will be driven primarily by strong gains in Chinese construction activity as industrialisation continues and income levels rise.

The introduction of new and better performing equipment will also boost growth, although longer machinery lifespans, the report added, could have an adverse impact on demand for replacement parts.

Technological improvements and pricing advantages thanks to low production costs have increased Chinese construction equipment manufacturers' global market share, turning a long-term trade deficit into a surplus for the first time in 2006.

In addition, said the report, the sustained growth in foreign investment in China's construction machinery markets could drive Chinese construction machinery shipments to advance faster than demand to CNY 187.4 billion (US$ 26.8 billion) in 2011.

Excavators and cranes remain the most commonly used construction machinery in China, benefiting from their widespread use in both building and non-building construction applications.

Wheeled loaders, and concrete mixers will see the fastest demand increases. These gains, added the report, will be driven by the versatility of loaders and the prohibition of on-site concrete mixing in Chinese city centre construction projects. This in turn will trigger demand for pre-mixed concrete and related mixing machinery.

Sales of compaction rollers and other equipment will also continue "to exhibit strong growth", said the report, supported by expanding road and other infrastructure construction activities. Demand for off-highway trucks and tractors is also expected to rise (+11.7% per year), relatively modest gains compared to other equipment in China, but still healthy, the report added.

According to the report, regional differences in economic, social and cultural conditions, coupled with the size, growth and composition of construction machinery demand in China's six regions vary considerably.

The Southwest and the Northwest remain largely underdeveloped. However, they are being targeted by the central government's "Go West" strategy, which should result in significant growth in construction equipment demand.

The market in the Northeast should also benefit from the government-initiated "Revival of the Northeast" project. However, the Central-East and Central-South will remain home to over half of China's total population and will account for large shares of overall construction machinery demand through 2011.

Latest News
Alimak takes action to improve Facade profits
Range of measures includes merging assembly sites 
John Kerry calls for nuclear fusion plant construction plan at COP28
US special climate envoy John Kerry has set out an international engagement plan to boost research into nuclear fusion ahead an eventual construction programme of a new generation of nuclear plants
Saudi fund loans $100m for construction of long-awaited Tajikistan hydropower project
The Saudi Fund for Development has signed a loan deal worth US$100 million with Tajikistan for the construction of the Rogun Hydropower project.