Dim Sum Express

Construction Machinery: Demand recovery likely to last until 2017

    Robust property sales growth seen earlier this year has passed on to the investment end, resultingin strong rebounds in excavator sales volume and utilization hours. Considering the delay in newproject launches, we believe the ongoing recovery in excavator demand will last until 1Q17. Afterthat, excavator demand will be dependent on the strength of investment growth and that ofgovernment policies designed to counter the decline in property sales. While current constructionmachinery sales volume tends to be smaller than the replacement demand of existing equipment,replacement demand only serves to provide a floor for sales volume rather than acting as a decisivedriver of sales growth.