Freedonia Market Research Analyzes China Market for Construction Equipment

Demand for construction machinery in China is projected to increase 12.7 percent per annum through 2011 to 181 billion yuan, outpacing advances in most other parts of the world.  Growth will be driven primarily by strong gains in Chinese construction activity as industrialization efforts continue and income levels rise.  The introduction of new and better performing equipment will also boost growth, although longer machinery lifespans could adversely impact demand for replacement parts going forward.  Technological improvements and pricing advantages due to low production costs have increased the global market share for China-made construction equipment, turning a long-term trade deficit into a surplus for the first time in 2006.  In addition, sustained strength in foreign investment in Chinese construction machinery markets will drive Chinese construction machinery shipments to advance faster than demand to 187.4 billion yuan in 2011. These and other trends, including market leaders and market size, are presented in Construction Machinery in China, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Excavators and cranes will remain the most commonly used construction machinery in China, benefiting from their widespread use in both building and nonbuilding construction applications.  Loaders, and mixers and related equipment will see the fastest demand increases.  Gains will be driven by the versatility of loaders and the prohibition of on-site concrete mixing in Chinese city center construction projects, which will trigger demand for premixed concrete and related mixing machinery.  Sales of rollers and other equipment will also continue to exhibit strong growth, supported by expanding road and other infrastructure construction activities in China.  Demand for off-highway trucks and tractors is expected to rise 11.7 percent per year, relatively modest gains compared to other equipment in China, but still healthy.

Due to regional differences in economic, social and cultural conditions, the size, growth and composition of construction machinery demand in the six regions of China vary considerably.  The Southwest and the Northwest remain largely underdeveloped; however, they are being targeted by the central government’s “Go West” strategy, which will result in significant growth in construction machinery demand.  The market in the Northeast will also benefit from government-initiated construction activity as a result of the “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.

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.