There were record sales of excavators in the early months of 2021, but the momentum had changed by the year's second quarter. While one-off factors influenced the slowdown, including poor weather, local government elections, and nationwide inspections following a series of construction accidents, OHR says the fundamentals of the slowdown were apparent.
"The most important factor is the lack of project funding, which not only slowed down the commencement of approved projects but also resulted in delayed payments for work already done. Although more funds have been released during the second half of 2021, a considerable part of these will be spent next year.
"Moreover, soaring prices of raw materials have discouraged contractors from carrying out work as originally planned if they were not able to negotiate acceptable compensation for their increased material costs.
"Last but not least, it is unlikely that new machine sales will be increased by the injection of funds during the rest of this year since many customers have already purchased machines for the approved projects and have waited long enough for them to start," said the OHR report.
The 80-plus page report on the hydraulic excavator industry in China is now available to subscribers to OHR's Chinese Service.
It is believed to be the most detailed and in-depth report ever published on the subject, with analysis covering market size, market shares, production, foreign trade, market structure, distribution networks, equipment population, end-user demographics, machines available and a five-year forecast.
