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China Construction Machinery Industry Will Face Four Major Challenges In 2014

2014-02-20 10:14:21



Construction machinery industry will face four major challenges this year:

Firstly, export growth is tremendously difficult. It is understood that although the construction machinery trade surplus has reached an all-time high of US $ 73.6 billion in 2013, years of export growth has led to increasing trade friction, and the RMB exchange rate continues to rise, so China construction machinery products export further expansion has increased the difficulty.

Secondly, funding pressures is increasing. In 2013, the phenomenon of construction machinery enterprises being owed money have not significantly changed, enterprise liquid funds are occupied in large quantity; while United States quantitative easing policy has exited to led the international liquidity fund tighten, will transmit to the domestic through trade and capital flow channels, so as to further increase the pressure of domestic enterprise liquidity crunch.

Thirdly, human resource and environmental resource cost increase fastly, and squeeze profit margins. In 2013, although the upstream product prices of raw materials, fuels still remain at relatively low level, construction machinery industry cost rise pressures still remains unabated, main activities is difficult to up. The main activity profit margin was only 6.57% last year, reduced 0.41% by 2012. Human resource and environmental resource cost is in the rapid upward path, will further squeeze the profit margins of domestic enterprises.

Fourthly, demand is not prosperous, price is still depressed. On base of the low index last year, the cumulative order of construction machinery important enterprises, have gradually increased the growth, and the trend has improved over the previous year, from January to December, the cumulative order amount has increased by 10.2%. But on the whole, order growth has remained sluggish. Under the pressure of inadequate order and oversupply, product price remains in the doldrums, construction machinery price index continued the downward trend of the previous year in 2013, at year's end, the price index had been less than 100% in 25 consecutive months.