Analysis of the construction machinery industry in 2023 and outlook for 2024: Excavator sales declined, while sales of construction hoisting machinery stabilized. The industry is expected to have steady development in 2024.

        At the end of 2023, the report card for the construction machinery industry has largely taken shape. According to the latest sales data released in November, excavators, as a barometer of the construction machinery industry, have seen a continuous year-on-year decline in sales for 12 consecutive months. The domestic market is still in a downturn, with weak demand for new equipment and a significant year-on-year decline in domestic sales. Exports have also been affected by a high base, leading to a further widening of the year-on-year decline. Experts believe that the industry has not yet hit bottom.

        Recently, the Chinese Construction Machinery Industry Association's Excavator Machinery Branch, Construction Hoisting Machinery Branch, and Construction Mechanization Branch have all held industry annual conferences at the end of the year, where experts from various sectors have conducted in-depth analyses of the relevant fields.

The decline in excavator machinery is expected to gradually narrow

        According to the data, in November 2023, domestic sales of excavators were 7484 units, a significant year-on-year drop of 48%. Domestic sales have continued to be under pressure, mainly due to excessive inventory, insufficient demand, and the high base caused by the surge in sales of National III equipment during the same period last year. Looking ahead, the sales volume of domestic excavators during the same period will enter a relatively low level, and the downward pressure is expected to gradually ease, with the decline expected to narrow.

        Su Zimeng, President of the China Construction Machinery Industry Association, reviewed the industry's performance at the annual meeting of the Excavator Machinery Branch and the Industrial Internet Branch of the China Construction Machinery Industry Association held in Changzhou, Jiangsu in November. He emphasized that despite the challenges such as the bottoming out of new machine sales, the high accumulation of social stock, and intensified competition among enterprises, the long-term outlook for the construction machinery industry remains positive, and he expressed cautious optimism for the next year.

        Huang Min, President of the Excavator Machinery Branch of the China Construction Machinery Industry Association, summarized the industry situation in 2023, stating that the current development of China's excavator machinery industry has entered a period of increased uncertainty, facing the triple pressure of shrinking demand, supply shocks, and weakening expectations. Despite the industry experiencing some cyclical adjustments, its strong resilience, great potential, and vitality remain unchanged, and the foundations and conditions supporting the high-quality development of the industry have also not changed.

        The industry leader and leading figure of the enterprise evaluated this year's construction machinery market at the meeting. Yu Hongfu, Director of Sany Group and President of Sany Heavy Industry, analyzed that the era of extensive growth has become history, and the possibility of a high-speed rebound is unlikely.

       Zeng Guangan, Party Secretary, Chairman, and CEO of Guangxi Liugong Machinery Co., Ltd., stated that the construction machinery industry is highly cyclical, and all the difficulties are a baptism for the past and the price for tomorrow's rebirth. The industry needs to adhere to the right path, engage in rational reflection, and be courageous in innovation.

        Yang Dongsheng, Chairman and Party Secretary of Xuzhou Construction Machinery Group Co., Ltd., stated that over the past year, the Chinese construction machinery industry has entered a new downturn cycle, with industry sales and profits contracting across the board. At the same time, since the third quarter of 2023, sales growth of leading global overseas brands, primarily from European, American, and Japanese manufacturers, has also slowed down. Overall, the global construction machinery industry is entering a new phase of consolidation, and future development is filled with great uncertainty.

The construction hoisting machinery market is stabilizing

        The construction hoisting machinery industry, as a sector of engineering machinery sensitive to market demand, has faced greater pressure this year. Yu Lekang, President of the Construction Hoisting Machinery Branch of the China Construction Machinery Industry Association, stated at a recent industry annual meeting that manufacturers of construction hoisting machinery are facing fierce price competition, leading to widespread losses for leasing companies. The overall sales of mainstream products from manufacturing companies continue to be under pressure, but exports have maintained a growth trend, partially offsetting the domestic market decline. Manufacturing companies are actively developing new products and technologies through research and development, and actively exploring international markets, resulting in overall stable development.

        According to the statistics of the branch, the sales of tower cranes and construction hoists from 30 key manufacturing companies in the industry totaled approximately 28,700 units and 17.9 billion RMB in the first 10 months. This represents a 25.5% decrease in the total number of units sold and an 11.3% decrease in sales revenue. Yu Lekang analyzed that compared to the relatively good profit performance of the overall engineering machinery industry, the construction hoisting machinery sector has seen a significant decline in recent years, mainly due to two reasons: the ongoing downturn in the real estate market and the unique characteristics of the construction hoisting industry itself. In response to the current situation, the primary task for industry enterprises is to "survive," and in order to "survive" with quality, President Yu proposed four suggestions: controlling risks, pursuing innovation, establishing a good positioning, and implementing refined management.

The industry operation is expected to remain stable overall in 2024

        Meng Wen, Vice President of XCMG Group Construction Machinery Co., Ltd., stated, "In 2024, China's infrastructure construction, real estate, and other sectors may stabilize and even show signs of improvement. As a result, the construction machinery industry is likely to achieve steady growth or experience a slight decline."

        Guo Xuehong, Vice President of SANY Heavy Industry Co., Ltd., believes, "Whether in 2024 or the medium to long term, it is unlikely that the Chinese construction machinery market will experience significant growth again. Under a progressive development, emerging sectors such as mining equipment and aerial work platforms are very likely to become the star performers."

        As a specialized manufacturer, Xue Xiaoqiang, Executive Vice President of Tonly Heavy Industries and Managing Director of Tonly Technology, stated, "In the medium to long term, the Chinese mining equipment market will continue to show positive growth trends, and the transformation towards low-carbon and green development will bring about a new phase of growth for enterprises."

        Miao Jianguo, Vice President of Sany Heavy Industry's Marketing Company, believes, "For Chinese construction machinery manufacturers, on one hand, the future domestic market demand remains considerable; on the other hand, the contribution from overseas markets to enterprises will accelerate and may even surpass the domestic market."

        The Secretary-General of the China Construction Machinery Industry Association, Wu Peiguo, provided an analysis of the industry's operation and development trends for 2024. He pointed out that the current overall industry operation is stable and shows a positive development trend, but there are significant differences between products. The domestic market is still at a low point, while the international market is experiencing high-level fluctuations. The industry is entering a new stage of wave-like development. In 2024, the industry's operation will remain stable overall, and in the long term, the industry will continue to remain stable and positive.