Machinery Industry: First Half Better Than Expected Second Half Pressure

According to the data released by the China Federation of Machinery Industry on August 9, the machinery industry continued to stabilize in the first half of this year. The major economic indicators rose slightly. The value-added of the machinery industry increased by 7.8%, which was 2.1 percentage points higher than that of the same period of last year.
"In the first half of the year, the machinery industry continued its steady state trend in the fourth quarter of last year, and the overall situation was better than expected at the beginning of the year," said Chen Bin, executive vice president of the China Federation of Machinery Industry.
The growth rate of added value is higher than that of the national industry
Since the beginning of this year, the growth rate of the value-added of the machinery industry has been reduced from the growth rate of the industrial and manufacturing industries in the country in the previous year to higher than the growth rate of the industrial and manufacturing industries in the country. From January to June, the value-added of machinery industry increased by 7.8% year-on-year, which was higher than that of the national industry and manufacturing industry by 1.8 and 0.9% respectively, which was higher than that of machinery industry by 2.1 percentage points over the same period of last year.
Data show that from January to June of this year, China's machinery industry's main business income was 11.29 trillion yuan, an increase of 6.68% year-on-year, 3.21 percentage points higher than the same period last year; total profit of 753.8 billion yuan, an increase of 6.53%, higher than on Year-on-year 6.4 percentage points. The main benefit indicators of the machinery industry show a steady state trend.
The data shows that the machinery industry products with positive growth in output have increased compared with last year. Among the 119 key industrial products monitored by China Machine Building, there are 60 products that have achieved cumulative growth in production year-on-year, accounting for 50.42% of the total, compared with only 30% of the products in the same period last year.
Specifically, the major continual declines in output are mainly in metal smelting equipment, machine tools, power generation equipment, oil drilling equipment and other investment products, optical instruments, cameras, and other agricultural machinery, as well as tractors, harvesting machines, and other agricultural machinery that have always maintained rapid growth in the early period. Products. The increase in output is mainly related to products that are closely related to consumption, technological upgrading, and environmental protection, such as automobiles, electrical instruments, automotive instruments, power capacitors related to power transmission and transformation, high-voltage switchgear, fiber optic cables, and special equipment for environmental pollution control. Molds, pneumatic components, metal seals and other parts products.
As the two key industries of the machinery industry, the automotive industry and the electrical and electronics industry have been contributing to promoting the steady development of the machinery industry driven by factors such as market demand, favorable policy, and large-scale upgrading of power generation and transmission and transformation. In the first half of the year, the income from the main business of the automotive industry increased by 9.9% year-on-year, and that of the electrical and electronic appliances industry increased by 8.21% year-on-year. Among the new main business income of the entire industry, the automobile industry accounted for 48.91%, and the electrical and electronics industry accounted for 28.88%. Accumulation of other industries accounted for only 22.21%.
Investment, exports and demand are still not optimistic
From January to June, investment in fixed assets in the whole society increased by 9% year-on-year. Manufacturing industry increased by 3.3% year-on-year, while investment in machinery industry increased by only 3.07%. It was the lowest growth rate in the same period since 2008, and the amount of investment completed in the month of June has dropped from the same period last year.
Judging from the trend, the growth rate of investment in fixed assets in the machinery industry has always been in a downtrend and the cumulative growth rate in the first half of the year has dropped by 7.86 percentage points from January to February. The growth rate of investment in equipment and appliance purchases has also continued to decline. From January to June, it has dropped to 1.56% year-on-year. The decline in the willingness of enterprises to invest directly affects the market demand in the future and must be highly concerned.
Chen Bin said that the decline in investment growth is related to the general situation, and it is also related to the large scale of the machinery industry itself. The scale of the machinery industry has far exceeded the market demand, and the demand for increasing the scale has declined. Even if there is only 3% increase, the scale is also quite large.
Dong Yang, executive vice president of the China Association of Automobile Manufacturers, said that in order to transform and upgrade, it must accept changes in some indicators. In the process of transition, investment growth is normal.
The foreign trade situation of the machinery industry is not optimistic and the market demand is not stable. Chen Bin said that under the pressure of economic downturn, the weakening of the domestic market for mechanical products will be difficult to significantly improve in the short term. The social possession of various types of machinery products has reached a considerable scale, and the demand for new equipment has decreased. The pressure on the industry's export situation remains relatively high.
Data show that in the first half of the year, the total import and export volume of the machinery industry decreased by 6.88% year-on-year, especially in the past as a private enterprise in the machinery industry’s foreign trade export force. This year's export growth rate has continued to decline and has fallen from the previous double-digit growth to Negative growth, Jiangsu, Zhejiang, Guangdong and other large export provinces have also seen negative growth.
However, this year, the accumulated orders of the key enterprises of the machinery industry have escaped the continuous decline of the previous year, and cumulative orders from January to June increased by 4.81% year-on-year, but the ordering situation is still not stable. The main reasons are as follows: First, due to the large amount of social stocks accumulated in the market during the period of high-speed growth in the early stage, the newly-started projects have a limited effect on the market. Second, upstream industries such as steel, coal, building materials, and petroleum are in a downturn, and demand for machinery and equipment has declined.
In addition, Chen Bin said that accounts receivable are also more serious problems. "At present, the amount of accounts receivable accounts for about one-third of the entire liquidity, or relatively high."
Transformation, upgrading, innovation and development continue to advance
"Under the guidance of relevant industrial policies such as the "Made in China 2025" Strategy, the transformation, upgrading and innovation of the machinery industry continue to advance." Chen Bin said that it can be seen that the independent research and development and innovation capabilities of China's machinery industry have achieved remarkable results, and intelligent manufacturing has begun. Starting, industry companies actively explore new ways of transformation and development.
Large-scale nuclear power, hydropower, thermal power and wind power equipment, UHV AC/DC and flexible DC power transmission and transformation equipment, key equipment for long-distance oil and gas transmission pipelines, key equipment for large-scale coal chemical industry, high-end CNC machine tools and other high-end equipment have achieved breakthroughs in independent research and development; Progress has been made in the construction of basic test and test platforms. Large-scale compressor test rigs, water wheel model test rigs, and power station safety valve test rigs have been completed one after another. Test and testing platforms with advanced world standards are still beginning to be built; automated production lines and digital workshop construction. Accelerate the continuous increase in the level of informationization in production, operations and management of enterprises. Take industrial robots as an example. According to statistics from the China Robotics Industry Alliance, China has become the world's largest consumer market for industrial robots for three consecutive years. The transformation of traditional enterprises into the manufacturing services industry continues to advance and service models continue to innovate. At present, the service-oriented manufacturing of the machinery industry has been extended to 13 subordinate industries, achieving a complete service chain from R&D design to product recycling and remanufacturing.
“In the second half of the year, good and pressure coexist. The industrial policy environment is conducive to the industry to promote structural adjustment, but the overall economic down-dense pressure and high industry retention will affect the industry.” Chen Bin said that the economic operation of the machinery industry is expected this year. Continuing the stabilization trend will be favorable. In the second half of the year, based on the overall stabilization, there will be slight fluctuations in the fourth quarter. The annual growth rate of the value added of the machinery industry will be slightly higher than that of the national industry and manufacturing industry.

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