Once the sales figures were made public, various media outlets expressed their opinions one after another. Some were confident in the market recovery, while others cautiously examined each growth point, comparing horizontally and vertically to find its logic from the simple rise and fall. However, fundamentally speaking, it is difficult to separate the dynamics of the construction machinery industry from macroeconomic and policy discussions.

From the perspective of excavator sales in recent years, 2020 was a hot year for the excavator market. Based on data analysis from the same month alone, the domestic sales volume in June 2020 reached 24625 units, setting a new high in recent years. This phenomenon is certainly related to the new replacement cycle of excavators, but economic and policy related factors also have a profound impact. At that time, the country implemented an active fiscal policy, actively expanded effective investment in infrastructure, and strengthened investment in traditional and new infrastructure.

But when looking back at this year, after the gradual relaxation of epidemic prevention and control policies, the originally predicted “retaliatory consumption” of residents still did not come as scheduled, and instead ushered in the “most difficult year for employment” – according to data released by the National Bureau of Statistics, the number of new job opportunities in the first quarter of this year decreased by about 15% compared to the same period last year, with college students being particularly affected, with the proportion of graduates becoming unemployed reaching 8.3%, the highest level in nearly a decade. This is only a small microcosm of the current domestic economic situation. From the perspective of infrastructure related policies, by 2024, 12 provinces including Tianjin, Inner Mongolia, Liaoning, Jilin, Heilongjiang, Guangxi, Chongqing, Guizhou, Yunnan, Gansu, Qinghai, and Ningxia will be required to strictly control new government investment projects. Projects with a total investment completion rate below 50% will generally be delayed or suspended. Projects with a total investment exceeding 50% but significant problems will not be allowed to continue construction. The situation remains tense, and the economic cycle has not caught a breath. The construction machinery industry, which is caught in the wheels, is also unlikely to be an exception. Therefore, it is relatively difficult to expect the construction machinery industry to fully recover in today’s economy.

However, if we turn to a micro perspective, although the sales of excavators in June this year were not as high as in 2020, 2021, and 2022, they are still at a historical high, which is also driven by policies. Since the State Council issued the “Action Plan for Promoting Large scale Equipment Renewal and Consumer Goods Trade in” in March this year, the implementation details of large-scale equipment renewal policies in various regions have been promulgated and implemented, which greatly accelerates the clearance speed of old construction machinery stock equipment and stimulates the demand for some new machinery renewal markets.

Therefore, judging from the current growth trend of excavators, it is somewhat arbitrary to believe that they symbolize economic recovery.

02. Export sales need to find new breakthroughs

In June, 8942 excavators were exported, a year-on-year decrease of 7.51% and a month on month decrease of 3.91%. Although this number is not as high as June 2023, it is still at a relatively high historical level.