China's machinery and equipment industry sales situation has gradually improved

In May 2012, 28 major excavator manufacturers reported sales of 10,870 units, marking a significant decline of 23.92% compared to the same period last year and a 29.28% drop from the previous month. From January to May, total industry sales reached 70,327 units, reflecting a year-on-year decrease of 39.67%. Despite the overall downturn, May saw a sharper-than-expected drop in demand, which many analysts believe was influenced by seasonal fluctuations. However, underlying trends suggest a gradual recovery in excavator demand, as evidenced by a continued decline in dealer inventories compared to April. According to on-the-ground reports, dealers showed increased confidence in the second half of the year, particularly for models like "Xiaoyangchun." If infrastructure projects gain momentum in the third quarter, excavator sales are expected to pick up significantly after September. Meanwhile, exports remained strong, with 704 units shipped in May—an 118.63% increase year-over-year—accounting for 6.48% of total sales, up from 5.56% in April. Orient Securities remains optimistic about the construction machinery sector, noting that this round of economic stimulus is likely to be heavily focused on infrastructure, which has a direct impact on demand for heavy equipment. While the industry faces challenges, the firm recommends focusing on top-tier companies with solid performance, such as Sany Heavy Industry (600031) and Zoomlion (000157), which have shown resilience despite market volatility. The outlook for the machinery industry appears cautiously positive, with signs of improvement emerging from both domestic demand and international markets. As infrastructure development gains traction, the sector may see a stronger rebound in the coming months.

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