Industry differentiation intensifies, the machinery industry may progress steadily.
Release time:
2021-12-29
Abstract
In the first half of this year, the economic operation of the machinery industry showed a stabilizing trend, with overall operating indicators better than those of the industrial sector and also better than the same period last year. From January to May, the national industrial added value increased by 5.9%, manufacturing grew by 6.7%, and the added value growth of the machinery industry was 7.6%, which was 1.7 and 0.9 percentage points higher than the industrial and manufacturing sectors, respectively. It was also 2.1 percentage points higher than the same period last year (5.5%). The growth rate of added value has returned to above the national industrial average after being below it last year. From January to April, the machinery industry achieved main business income of 71,649.99 billion yuan, a year-on-year increase of 5.63%.
Cai Weici, a special advisor to the China Machinery Industry Federation, summarized the economic operation trend in the first half of the year as: downward stabilization with a slight rebound; the automotive and electrical industries contributed the most; differentiation intensified, with private enterprises performing better. In response to the industry's "U-shaped" and "L-shaped" judgments, Cai Weici assessed that the current bottom of the "L-shaped" trend is basically visible and will continue. Looking at the whole year, the industry may undergo low-level consolidation, and through transformation and upgrading, it will progress steadily. The China Machinery Federation believes that currently, due to relevant industries completing tasks of capacity reduction, destocking, and deleveraging, the impact on the machinery industry is significant, with weak industry demand and intensified differentiation, and the stabilizing trend still needs to be solidified.
A. Data One
Main economic indicators are better than the same period last year, and the growth trend of major product output has improved.
Industrial added value: From January to May, the national industrial added value increased by 5.9%, manufacturing grew by 6.7%, and the machinery industry added value growth rate was 7.6%, which was 1.7 and 0.9 percentage points higher than the industrial and manufacturing sectors, respectively. It was also 2.1 percentage points higher than the same period last year (5.5%). The growth rate of added value has returned to above the national industrial average after being below it last year.
Main business income: From January to April, the machinery industry achieved main business income of 71,649.99 billion yuan, a year-on-year increase of 5.63%, which is 3.35 percentage points higher than the national industrial average (2.28%); it is also 1.73 percentage points higher than the machinery industry growth rate of the same period last year (3.9%).
Total profit achieved: From January to April, the machinery industry achieved a total profit of 4,643.28 billion yuan, a year-on-year increase of 6.36%, slightly lower than the national industrial average (6.52%) by 0.16 percentage points; it is 5.53 percentage points higher than the machinery industry growth rate of the same period last year (0.83%).
From the trend, the cumulative growth rate of the machinery industry added value has increased month by month. The added value growth rate from January to March increased by 0.7 percentage points compared to January to February; from January to April, it increased by 0.2 percentage points compared to January to March. From January to May, it increased by 0.3 percentage points compared to January to April.
The growth trend of major product output has slightly improved. Among the 119 major products monitored in the machinery industry, half of the major product varieties decreased from January to April, while from January to May, more than half of the varieties showed year-on-year growth.
From January to May, 61 product varieties showed year-on-year growth, accounting for 51.26%, while 58 product varieties showed a year-on-year decline, accounting for 48.74%. Only 16 products showed double-digit growth. The number of product varieties showing year-on-year growth has been increasing month by month, but there are significant differences between products, continuing to show a trend of differentiation.
Major economic efficiency indicators have slightly improved year-on-year. From January to April, the machinery industry's capital preservation and appreciation rate was 110.27%, which is 3.42 percentage points higher than the national industrial average (106.85%); the asset-liability ratio is at a reasonable level of 54.49%, which is 2.31 percentage points lower than the national industrial average (56.8%); the turnover rate of current assets is 1.88 times, a year-on-year decrease of 0.02 times, but an increase of 0.02 times compared to January to March (1.86 times); the cost-profit ratio is 6.95%, a year-on-year increase of 0.06 percentage points; the profit margin is 6.48%, a year-on-year increase of 0.04 percentage points.
The increase in management expenses is lower than the same period last year, while sales and financial expenses have significantly increased. From January to April, the machinery industry's management expenses increased by 6.23% year-on-year, lower than the same period last year (7.3%) by 1.07 percentage points; sales expenses increased by 4.72% year-on-year, higher than the same period last year (3.33%) by 1.39 percentage points; financial expenses increased by 8.35% year-on-year, significantly higher than the same period last year (-6.02) by 14.37 percentage points, with interest expenses decreasing by 4.65% year-on-year.
B. Data Two
Machinery industry investment growth rate declines, key contact enterprises face insufficient orders.
Inventory and finished products slightly increased, while accounts receivable grew relatively quickly. From January to April, the machinery industry inventory was 24,138.47 billion yuan, a year-on-year increase of 0.17%, lower than last year's (7.3%) level, of which finished products were 9,278.63 billion yuan, a year-on-year increase of 1%, lower than last year's (10.28%) level. Accounts receivable were 37,179.08 billion yuan, a year-on-year increase of 10.69%, higher than the national industrial average (8.48%) and also higher than the same period last year (6.1%). Accounts receivable accounted for 32.48% of total current assets, an increase of 1.09 percentage points compared to the same period last year (31.39%). From the cumulative growth rate of each month, there has been an increase compared to the same period last year.
This year, the cumulative order amount of key contact enterprises in the machinery industry has escaped the trend of year-on-year decline, with a year-on-year increase of 4.43% from January to March, recovering 13.67 percentage points compared to the same period last year (-9.24%). From January to April, the cumulative order increased by 3.65% year-on-year, a decrease of 0.78 percentage points compared to January to March, indicating an unstable order situation. Although the issue of insufficient orders has improved, the problem of underutilization of capacity compared to the peak production years remains prominent.
The investment growth rate of the machinery industry is declining. According to the National Bureau of Statistics, from January to May, the total fixed asset investment in society increased by 9.6%, while machinery industry investment grew by 6.31%, which is 3.29 percentage points lower than the overall investment growth rate, but 1.71 percentage points higher than manufacturing (4.6%).
In May, the investment completed was 4,432.06 billion yuan, a year-on-year decrease of 1.62%, a drop of 10.55 percentage points compared to the same period last year (8.93%). In the first three months of 2016, the investment growth rate was higher than the same period last year, with a year-on-year increase of 6.31% from January to May, lower than January to April and also lower than the same period last year (9.23%) by 2.92 percentage points.
Among the 13 major industries in the machinery industry, the electrical and electronic industry grew by 11.98% year-on-year, automotive by 12.42%, machinery basic components by 10.81%, cultural and office equipment by 23.39%, food packaging machinery by 14.58%, and construction machinery by 8.41%, all of which were higher than the industry average.
The agricultural machinery, internal combustion engine, heavy machinery, and machine tool industries experienced year-on-year declines. The instrument and meter, petrochemical general, and other civil machinery industries saw slight increases of around 1%.
From January to May, small industries with a year-on-year investment growth rate decline of over 30% include: manufacturing of special equipment for agricultural and sideline food processing, manufacturing of special equipment for feed production, manufacturing of fishing machinery, manufacturing of cotton processing machinery, manufacturing of special instruments and meters for agriculture, forestry, animal husbandry, and fishery, manufacturing of other instruments and meters, manufacturing of special equipment for marine engineering, manufacturing of special equipment for rubber processing, manufacturing of turbines and auxiliary machines, and manufacturing of water turbines and auxiliary machines, all showing declines exceeding 30%.
The foreign trade import and export of the machinery industry remains pessimistic. From January to April, the total import and export volume of the machinery industry accounted for about 18% of the national total. In the first four months of 2016, the total import and export volume of the machinery industry was 198.497 billion USD, a year-on-year decrease of 8.95%, with imports at 81.812 billion USD, a year-on-year decrease of 10.6%, and exports at 116.685 billion USD, a year-on-year decrease of 7.75%.
It is worth noting that private enterprises, which account for 40% of the industry's exports, have historically seen double-digit growth in exports, but since last year, this has begun to decline month by month. In the first four months of this year, both imports and exports showed negative growth, especially exports, which changed from a year-on-year increase of 8.8% last year to a year-on-year decrease of 1.03% in the first four months of this year; the export provinces of Jiangsu, Zhejiang, and Guangdong saw year-on-year declines of 5.46%, 5.5%, and 5.84%, respectively, indicating significant pressure on machinery industry exports.
C. Operational Characteristics
The development of the industry is uneven, and differentiation among industries is intensifying.
From the operational characteristics of the first half of the year, differentiation continues to intensify both between and within industries. In the first half of this year, among the 13 major industries, the electrical and electronic industry grew by 11.98% year-on-year, automotive by 12.42%, machinery basic components by 10.81%, cultural and office equipment by 23.39%, food packaging machinery by 14.58%, and construction machinery by 8.41%, all of which were higher than the industry average. In particular, the electrical and automotive sectors have played a significant role in driving industry development. The agricultural machinery, internal combustion engine, heavy machinery, and machine tool industries experienced year-on-year declines, while the instrument and meter, petrochemical general, and other civil machinery industries saw slight increases of around 1%.
From the perspective of specific industry development, the economic operation of the electrical industry in the first half of 2016 showed characteristics of overall slow growth, profit growth exceeding revenue growth but beginning to decline, and production showing mixed increases and decreases, with a severe foreign trade situation. According to the electrical association, from January to May, the investment in power construction was 90.3 billion yuan, a decrease of 8 billion yuan compared to the same period last year. The investment in grid construction was 163.8 billion yuan, although it increased by 46.1 billion yuan compared to the same period last year, the investment in grid construction will still show an accelerating trend in recent years due to adjustments in the structure of national power construction investment. The average utilization hours of power generation equipment nationwide were 1,484 hours, a decrease of 117 hours compared to the same period last year. In terms of import and export, the depreciation of the renminbi may promote exports to a certain extent, but due to insufficient external demand in the international market, the export situation is not optimistic. In terms of fixed asset investment, the year-on-year growth rate of the electrical industry is still around 10%, which is basically consistent with the overall investment growth rate of the machinery industry, and this trend may continue in 2016. To accelerate industry development, the electrical association suggests speeding up the implementation of the "Made in China 2025" high-end equipment innovation project and promoting deep integration of the two industries in key sectors, especially implementing the "going out" strategy and strengthening international capacity cooperation. The association's relevant person in charge told reporters that the electrical industry has already set an example in implementing the "going out" strategy and promoting international capacity cooperation, with leading enterprises in power generation and transmission and transformation taking the lead and achieving certain results. Therefore, it is hoped that all advantageous enterprises in the industry that meet certain conditions will actively expand international cooperation areas, increase market space, and improve internationalization levels.
From the perspective of the petrochemical industry, in the first half of this year, China's petroleum and petrochemical equipment manufacturing industry is still deeply affected by the long-term sluggishness of both domestic and international markets, with economic operations continuing the development trend of the previous year, and stabilization and recovery remain weak. From January to April, the economic operation indicators of the industry were generally lower than those of the entire machinery industry, characterized by a significant year-on-year decrease in the output of major products (oil drilling equipment), negative year-on-year growth in export delivery value and total profit, and a downward trend, with the year-on-year growth rate of main business income being comparable to that of 2015. A relevant person in charge of the petrochemical industry association stated that the overall economic operation is currently showing an "L-shaped" trend, with the bottom fluctuating around zero, and it is very difficult to break through zero and stabilize and recover, making the situation not optimistic.
From the perspective of the machine tool industry, the development data for the first three months of this year show that the demand in the Chinese machine tool market has shown signs of temporary recovery, and the downward trend of the industry operation has slowed. The main economic indicators of the industry have adjusted, but overall, it is still under pressure and operating at a low level. The main business income of the entire industry decreased by 6.2% year-on-year. The main business income of metal processing machine tools decreased by 7.9% year-on-year. Among them, the main business income of metal cutting machine tools decreased by 7.8% year-on-year; the main business income of metal forming machine tools decreased by 8.6% year-on-year. The main business income of tools and measuring tools decreased by 13.1% year-on-year.
The output of metal processing machine tools decreased by 19.2% year-on-year. Among them, the output of cutting machine tools decreased by 18.3% year-on-year, and the output of metal forming machine tools decreased by 24.2% year-on-year. The export of machine tool products continues to show a year-on-year decline, and the decline has increased compared to the previous month. The export value was 2.34 billion USD, a year-on-year decrease of 12%. Among them, the export value of metal processing machine tools was 670 million USD, a year-on-year decrease of 16.9%; the export value of metal cutting machine tools was 440 million USD, a year-on-year decrease of 17.8%; the export value of metal forming machine tools was 230 million USD, a year-on-year decrease of 14.9%. The export value of cutting tools was 530 million USD, a year-on-year decrease of 7%; and abrasives and grinding tools were 480 million USD, a year-on-year decrease of 6.8%. The overall import of machine tool products shows a downward trend, but the decline has narrowed compared to the end of last year, with a significant rebound in imports in March. From January to March, the total import and export value was 5.53 billion USD, a year-on-year decrease of 12.4%; the import value was 3.19 billion USD, a year-on-year decrease of 12.5%; and the trade deficit was 850 million USD, a year-on-year decrease of 14.1%.
D. Market Conditions
In May, the manufacturing purchasing managers' index was 50.1%.
According to data from the National Bureau of Statistics, in May 2016, China's manufacturing purchasing managers' index (PMI) was 50.1%, unchanged from the previous month, remaining in the expansion range for three consecutive months.
By enterprise size, the PMI for large enterprises was 50.3%, a decrease of 0.7 percentage points from the previous month, but still above the critical point; the PMI for medium-sized enterprises was 50.5%, an increase of 0.5 percentage points from the previous month, returning to the expansion range; the PMI for small enterprises was 48.6%, an increase of 1.7 percentage points from the previous month, although still below the critical point, the contraction has narrowed.
From the classification index, among the five classification indices that make up the manufacturing PMI, the production index, new orders index, and supplier delivery time index were above the critical point, while the employment index and raw material inventory index were below the critical point.
The production index was 52.3%, a slight increase of 0.1 percentage points from the previous month, remaining above the critical point, indicating that manufacturing production continues to grow steadily.
The new orders index was 50.7%, although it decreased by 0.3 percentage points from the previous month, it has remained above the critical point for three consecutive months, indicating that manufacturing market demand continues to expand, but the growth rate is slowing.
The employment index was 48.2%, an increase of 0.4 percentage points from the previous month, remaining below the critical point, indicating that manufacturing enterprises have reduced their workforce, but the decline has narrowed.
The raw material inventory index was 47.6%, a slight increase of 0.2 percentage points from the previous month, remaining below the critical point, indicating that the inventory of major raw materials in manufacturing continues to decrease.
The supplier delivery time index was 50.4%, an increase of 0.3 percentage points from the previous month, indicating that the delivery time of raw material suppliers in manufacturing has accelerated compared to the previous month.
E. Suggestion One
Strategically plan the "13th Five-Year Plan" and effectively tackle the challenges of transformation and upgrading.
Wang Ruixiang, president of the China Machinery Industry Federation, recently stated that this year marks the beginning of the "13th Five-Year Plan" and is a crucial stage for China to build a moderately prosperous society.
In the first half of this year, the economic operation of the machinery industry showed a stabilizing trend, with overall operating indicators better than the industrial sector and also better than the same period last year. From January to May, the national industrial added value increased by 5.9%, the manufacturing industry grew by 6.7%, and the added value growth rate of the machinery industry was 7.6%, which was 1.7 and 0.9 percentage points higher than the industrial and manufacturing sectors, respectively. At the same time, it was also 2.1 percentage points higher than the same period last year (5.5%). The growth rate of added value has returned to above the national industrial average after being below it last year. From January to April, the machinery industry achieved main business income of 71,649.99 billion yuan, a year-on-year increase of 5.63%.
Cai Weici, a special advisor to the China Machinery Industry Federation, summarized the economic operation trend in the first half of the year as: downward stabilization with a slight rebound; the automotive and electrical industries contributed the most; differentiation intensified, with private enterprises performing better. In response to the industry's two judgments of 'U-shaped' and 'L-shaped' trends, Cai Weici assessed that the current bottom of the 'L-shaped' trend is basically visible and will continue. Looking at the whole year, the industry may undergo low-level consolidation, and through transformation and upgrading, it will progress steadily. The China Machinery Federation believes that currently, due to relevant industries completing tasks of capacity reduction, destocking, and deleveraging, the impact on the machinery industry is significant, with weak industry demand and intensified differentiation, and the stabilizing trend still needs to be solidified.
A, Data One
Main economic indicators are better than the same period last year; the growth trend of main product output has improved.
Industrial added value: From January to May, the national industrial added value increased by 5.9%, the manufacturing industry grew by 6.7%, and the added value growth rate of the machinery industry was 7.6%, which was 1.7 and 0.9 percentage points higher than the industrial and manufacturing sectors, respectively. At the same time, it was also 2.1 percentage points higher than the same period last year (5.5%). The growth rate of added value has returned to above the national industrial average after being below it last year.
Main business income: From January to April, the machinery industry achieved main business income of 71,649.99 billion yuan, a year-on-year increase of 5.63%, which is 3.35 percentage points higher than the national industrial average (2.28%); it is also 1.73 percentage points higher than the machinery industry's growth rate in the same period last year (3.9%).
Total profit achieved: From January to April, the machinery industry achieved a total profit of 4,643.28 billion yuan, a year-on-year increase of 6.36%, slightly lower than the national industrial average (6.52%) by 0.16 percentage points; it is 5.53 percentage points higher than the machinery industry's growth rate in the same period last year (0.83%).
From the trend, the cumulative growth rate of the machinery industry's added value has increased month by month. The added value growth rate from January to March increased by 0.7 percentage points compared to January to February; from January to April, it increased by 0.2 percentage points compared to January to March. From January to May, it increased by 0.3 percentage points compared to January to April.
The growth trend of main product output has slightly improved. Among the 119 main products monitored in the machinery industry, half of the main product varieties decreased from January to April, while more than half of the varieties showed year-on-year growth from January to May.
From January to May, there were 61 product varieties with year-on-year growth, accounting for 51.26%, while 58 product varieties showed a year-on-year decline, accounting for 48.74%. Only 16 products had double-digit growth. The number of product varieties with year-on-year growth is increasing month by month, but there are significant differences between products, continuing to show a trend of differentiation.
Main economic efficiency indicators have slightly improved year-on-year. From January to April, the capital preservation and appreciation rate of the machinery industry was 110.27%, which is 3.42 percentage points higher than the national industrial average (106.85%); the asset-liability ratio is at a reasonable level, at 54.49%, which is 2.31 percentage points lower than the national industrial average (56.8%); the turnover rate of current assets is 1.88 times, a year-on-year decrease of 0.02 times, but an increase of 0.02 times compared to January to March (1.86 times); the cost-profit ratio is 6.95%, a year-on-year increase of 0.06 percentage points; the profit margin is 6.48%, a year-on-year increase of 0.04 percentage points.
The increase in management expenses is lower than the same period last year, while sales and financial expenses have significantly increased. From January to April, the management expenses of the machinery industry increased by 6.23% year-on-year, lower than the same period last year (7.3%) by 1.07 percentage points; sales expenses increased by 4.72% year-on-year, higher than the same period last year (3.33%) by 1.39 percentage points; financial expenses increased by 8.35% year-on-year, significantly higher than the same period last year (-6.02) by 14.37 percentage points, of which interest expenses decreased by 4.65% year-on-year.
B, Data Two
The growth rate of machinery industry investment is declining; key connected enterprises have insufficient orders.
Inventory and finished products have slightly increased, while accounts receivable have grown relatively quickly. From January to April, the machinery industry had inventory of 24,138.47 billion yuan, a year-on-year increase of 0.17%, lower than last year's level (7.3%), of which finished products were 9,278.63 billion yuan, a year-on-year increase of 1%, lower than last year's level (10.28%). Accounts receivable were 37,179.08 billion yuan, a year-on-year increase of 10.69%, higher than the national industrial average (8.48%) for the same period, and also higher than the machinery industry's level in the same period last year (6.1%). Accounts receivable accounted for 32.48% of total current assets, an increase of 1.09 percentage points compared to the same period last year (31.39%). From the cumulative growth rate of each month, there has been an increase compared to the same period last year.
This year, the cumulative order amount of key connected enterprises in the machinery industry has escaped the trend of year-on-year decline, with a year-on-year growth of 4.43% from January to March, recovering 13.67 percentage points compared to the same period last year (-9.24%). From January to April, the cumulative order increased by 3.65% year-on-year, which is a decrease of 0.78 percentage points compared to January to March, indicating an unstable order situation. Although the issue of insufficient orders has improved, the problem of insufficient capacity utilization compared to the highest production years remains prominent.
The growth rate of machinery industry investment is declining. According to the National Bureau of Statistics, from January to May, the total fixed asset investment in society increased by 9.6% year-on-year, while machinery industry investment grew by 6.31%, which is 3.29 percentage points lower than the overall social investment growth rate, but 1.71 percentage points higher than the manufacturing industry (4.6%).
In May, the investment completed was 443.206 billion yuan, a year-on-year decrease of 1.62%, which is a drop of 10.55 percentage points compared to the same period last year (8.93%). In the first three months of 2016, the investment growth rate was higher than the same period last year, with a year-on-year growth of 6.31% from January to May, lower than January to April, and also lower than the same period last year (9.23%) by 2.92 percentage points.
Among the 13 major industries in the machinery industry, the electrical and electronic industry grew by 11.98% year-on-year, the automotive industry grew by 12.42%, the basic machinery parts grew by 10.81%, cultural and office equipment grew by 23.39%, food packaging machinery grew by 14.58%, and the construction machinery industry grew by 8.41%, all of which are higher than the industry average.
The agricultural machinery, internal combustion engine, heavy machinery, and machine tool industries experienced year-on-year declines. The instrument and meter, petrochemical general, and other civil machinery industries saw a slight increase of about 1%.
From January to May, small industries with a year-on-year investment growth rate decline of over 30% include: manufacturing of special equipment for agricultural and sideline food processing, manufacturing of special equipment for feed production, manufacturing of fishery machinery, manufacturing of cotton processing machinery, manufacturing of special instruments and meters for agriculture, forestry, animal husbandry, and fishery, manufacturing of other instruments and meters, manufacturing of special equipment for marine engineering, manufacturing of special equipment for rubber processing, manufacturing of steam turbines and auxiliary machines, and manufacturing of water turbines and auxiliary machines, all of which saw declines exceeding 30%.
The foreign trade import and export of the machinery industry is still not optimistic. From January to April, the total import and export volume of the machinery industry accounted for about 18% of the national total. In the first four months of 2016, the total import and export volume of the machinery industry was 198.497 billion USD, a year-on-year decrease of 8.95%, of which imports were 81.812 billion USD, a year-on-year decrease of 10.6%, and exports were 116.685 billion USD, a year-on-year decrease of 7.75%.
It is worth noting that private enterprises, which account for 40% of the industry's exports, have previously seen double-digit growth in exports, but since last year, this has begun to decline month by month. In the first four months of this year, both imports and exports showed negative growth, especially the export growth rate changed from an increase of 8.8% in the same period last year to a year-on-year decrease of 1.03% in the first four months of this year; the export volumes of major exporting provinces such as Jiangsu, Zhejiang, and Guangdong decreased by 5.46%, 5.5%, and 5.84% year-on-year, respectively, indicating significant pressure on machinery industry exports.
C. Operational Characteristics
The development of the industry is uneven, and the differentiation between industries is intensifying.
From the operational characteristics in the first half of the year, the differentiation between industries and within the industry continues to intensify. In the first half of this year, among the 13 major industries, the electrical and electronic industry grew by 11.98% year-on-year, the automotive industry grew by 12.42%, the machinery basic components grew by 10.81%, the cultural and office equipment grew by 23.39%, the food packaging machinery grew by 14.58%, and the construction machinery industry grew by 8.41%, all of which were higher than the industry average. In particular, the electrical and automotive sectors played a significant role in driving industry development. The agricultural machinery, internal combustion engine, heavy machinery, and machine tool industries saw year-on-year declines, while the instrument and meter, petrochemical general, and other civil machinery industries saw slight increases of about 1%.
From the perspective of specific industry development, in the first half of 2016, the economic operation of the electrical industry showed characteristics of overall slow growth, profit growth exceeding revenue growth but beginning to decline, production levels varying, and a severe foreign trade situation. According to the Electrical Association, from January to May, the completed investment in power construction was 90.3 billion yuan, a decrease of 8 billion yuan compared to the same period last year. The completed investment in grid construction was 163.8 billion yuan, although it increased by 46.1 billion yuan compared to the same period last year, the investment in grid construction will still show an accelerating trend in the coming years due to the adjustment of the national power construction investment structure. The average utilization hours of power generation equipment nationwide were 1484 hours, a decrease of 117 hours compared to the same period last year. In terms of import and export, the depreciation of the yuan may promote exports to a certain extent, but due to insufficient external demand in the international market, the export situation will not be optimistic. In terms of fixed asset investment, the year-on-year growth rate of the electrical industry is still around 10%, which is basically consistent with the overall investment growth rate of the machinery industry, and this trend may continue in 2016. To accelerate industry development, the Electrical Association suggests speeding up the organization and implementation of the "Made in China 2025" high-end equipment innovation project, promoting deep integration of the two industries in key sectors, and particularly implementing the "going out" strategy to strengthen international capacity cooperation. The relevant person in charge of the association told reporters that the electrical industry has already seen leading enterprises in power generation and transmission and transformation take the lead in implementing the "going out" strategy and has achieved certain results. Therefore, it is hoped that all advantageous enterprises in the industry that meet certain conditions will actively expand international cooperation areas, increase market space, and improve internationalization levels.
From the perspective of the petrochemical industry development, in the first half of this year, China's petroleum and petrochemical equipment manufacturing industry is still deeply affected by the long-term sluggishness of both domestic and international markets, and the economic operation continues the development trend of the previous year, with weak stabilization and recovery. From January to April, the economic operation indicators of the industry were generally lower than those of the entire machinery industry, characterized by a significant year-on-year decrease in the production of major products (oil drilling equipment), negative year-on-year growth in export delivery value and total profit, and a downward trend, with the year-on-year growth rate of main business income comparable to that of 2015. A relevant person in charge of the petrochemical industry association stated that the overall economic operation is currently showing an "L-shaped" trend, with the bottom fluctuating around zero, and growth is weak, making it very difficult to break through zero and stabilize and recover, and the situation is not optimistic.
From the perspective of the machine tool industry development, the development data for the first three months of this year shows that the demand in China's machine tool market has shown signs of temporary warming, and the downward trend of the industry operation is slowing down. The main economic indicators of the industry have adjusted, but overall, it is still in a low-pressure operating state. The main business income of the entire industry decreased by 6.2% year-on-year. The main business income of metal processing machine tools decreased by 7.9% year-on-year. Among them, the main business income of metal cutting machine tools decreased by 7.8% year-on-year; the main business income of metal forming machine tools decreased by 8.6% year-on-year. The main business income of tools and measuring instruments decreased by 13.1% year-on-year.
The production of metal processing machine tools decreased by 19.2% year-on-year. Among them, the production of cutting machine tools decreased by 18.3% year-on-year, and the production of metal forming machine tools decreased by 24.2% year-on-year. The export of machine tool products continues the year-on-year decline trend, and the decline has increased compared to the previous month. The export value was 2.34 billion USD, a year-on-year decrease of 12%. Among them, the export value of metal processing machine tools was 670 million USD, a year-on-year decrease of 16.9%; the export value of metal cutting machine tools was 440 million USD, a year-on-year decrease of 17.8%; the export value of metal forming machine tools was 230 million USD, a year-on-year decrease of 14.9%. The export value of cutting tools was 530 million USD, a year-on-year decrease of 7%; abrasives and grinding tools were 480 million USD, a year-on-year decrease of 6.8%. The overall import of machine tool products shows a downward trend, but the decline has narrowed compared to the end of last year, with a significant rebound in imports in March. From January to March, the total import and export value was 5.53 billion USD, a year-on-year decrease of 12.4%; the import value was 3.19 billion USD, a year-on-year decrease of 12.5%; and the trade deficit was 850 million USD, a year-on-year decrease of 14.1%.
D. Market Conditions
The manufacturing purchasing managers' index in May was 50.1%.
According to data from the National Bureau of Statistics, in May 2016, China's manufacturing purchasing managers' index (PMI) was 50.1%, unchanged from the previous month, remaining in the expansion range for three consecutive months.
By enterprise size, the PMI for large enterprises was 50.3%, a decrease of 0.7 percentage points from the previous month, but still above the critical point; the PMI for medium-sized enterprises was 50.5%, an increase of 0.5 percentage points from the previous month, returning to the expansion range; the PMI for small enterprises was 48.6%, an increase of 1.7 percentage points from the previous month, although below the critical point, the contraction has narrowed.
From the classification index, among the five classification indices that make up the manufacturing PMI, the production index, new orders index, and supplier delivery time index are above the critical point, while the employment index and raw material inventory index are below the critical point.
The production index was 52.3%, a slight increase of 0.1 percentage points from the previous month, remaining above the critical point, indicating that manufacturing production continues to grow steadily.
The new orders index was 50.7%, although it decreased by 0.3 percentage points from the previous month, it has remained above the critical point for three consecutive months, indicating that market demand in the manufacturing sector continues to expand, but the growth rate is slowing.
The employment index was 48.2%, an increase of 0.4 percentage points from the previous month, remaining below the critical point, indicating that the employment volume in manufacturing enterprises has decreased, but the decline has narrowed.
The raw material inventory index was 47.6%, a slight increase of 0.2 percentage points from the previous month, remaining below the critical point, indicating that the inventory of main raw materials in manufacturing continues to decrease.
The supplier delivery time index was 50.4%, an increase of 0.3 percentage points from the previous month, above the critical point, indicating that the delivery time of raw material suppliers in manufacturing has accelerated compared to the previous month.
E. Suggestion One
Plan for the "13th Five-Year Plan" and fight the tough battle of transformation and upgrading.
Wang Ruixiang, president of the China Machinery Industry Federation, recently stated that this year marks the beginning of the "13th Five-Year Plan" and is the starting year for China to enter the decisive stage of building a moderately prosperous society. It is also a critical year for implementing the strategy of becoming a manufacturing powerhouse and achieving the transformation and upgrading of the machinery industry. The machinery industry should follow the deployment requirements of "Made in China 2025" and the "13th Five-Year Plan" industry development outline, using reform as the driving force and focusing on problems, adhering to innovation-driven, intelligent transformation, and green development, striving to stabilize growth, adjust structure, fill gaps, promote integration, and strengthen capabilities, accelerating quality improvement and efficiency upgrades to lay a solid foundation for the development of the "13th Five-Year Plan".
Wang Ruixiang said that at the beginning of the year, the China Machinery Industry Federation proposed the basic ideas for industry development in 2016, clarifying that the focus is on quality and efficiency, promoting stable growth in the industry; structural adjustment as the main line, accelerating industrial optimization and upgrading; innovation-driven as the core, enhancing the comprehensive competitiveness of the industry; intelligent manufacturing as the main direction, promoting deep integration of the two industries and using reform as the driving force to achieve five key tasks for innovative development.
Now, the entire industry is united and has launched a tough battle for a good start. From the data of the industry operation in the first quarter, initial results have already emerged. Wang Ruixiang emphasized the need to deeply understand the new normal and firmly establish a new development concept. During the "13th Five-Year Plan" period, a significant feature of China's economic development is entering the new normal, which is the major logic for us to think and plan development. In understanding the new normal, we should follow General Secretary Xi Jinping's requirement to "accurately grasp the connotation and pay attention to overcoming several tendencies." The new normal is an objective state, an inherent necessity, and there is no distinction between good and bad; we should plan, act, and advance according to the situation. The new normal is mainly reflected in the economic field, and we should not misuse the concept; the new normal is not a safe haven, and we should not attribute all difficult or challenging tasks to the new normal. Despite facing significant downward pressure, China's economy is still in a strategic opportunity period where great things can be achieved, and we need to better leverage our subjective initiative and promote development with more creativity.
F, Suggestion Two
Tightly focus on the goals of supply-side reform to promote industry transformation and upgrading.
Currently, the supply-side structural reform being promoted in China's economic field is a significant theoretical innovation by the Party in response to the trend of world economic development and leading the new normal of China's economic development. It is a major measure that relates to the overall situation and long-term development. The focus of the supply-side reform in the machinery industry is to continue expanding effective demand while effectively resolving overcapacity, promoting industrial optimization and restructuring, reducing enterprise costs, developing strategic emerging industries and service-oriented manufacturing, improving the adaptability and flexibility of the supply structure to changes in demand, enhancing the quality and effectiveness of supply, and increasing total factor productivity. In short, it is to achieve a leap from low-level supply-demand balance to high-level supply-demand balance through "three reductions and two supplements." The main direction is to reduce ineffective supply, expand effective supply, and improve supply capacity.
"In the new round of development, we must take supply-side structural reform as the main direction and accurately focus on its goals and requirements," Wang Ruixiang emphasized. In reducing capacity, inventory, and leverage, we should follow objective economic laws, connect with both domestic and international markets, actively reduce, resolutely reduce, and ensure thorough reductions; in reducing costs, we should strive to tap potential, innovate management and production operation models, enhance soft power, improve efficiency, reduce costs, control risks, and increase benefits. We must be serious, put in real effort, and achieve tangible results; in filling gaps, we should focus on prominent bottlenecks affecting supply quality and efficiency, key issues affecting the enhancement of total factors, and critical links affecting the release of market vitality, targeting the high end of the industrial chain and value chain, and focusing on weak, key, and critical areas to promote the vigorous development of new technologies, new industries, and new business formats, providing lasting endogenous momentum for sustained and healthy economic development. Leaders in various professional fields play a leading role in promoting supply-side reform and industry transformation and upgrading, and we hope everyone will continue to work hard and take new steps in promoting quality improvement and efficiency upgrades in the machinery industry.
We must implement the strategy of becoming a manufacturing powerhouse and accelerate the transformation of the machinery industry from large to strong. Currently, the "Made in China 2025" strategy being promoted injects strong momentum and provides rare opportunities for the development of the machinery industry. As a foundational strategic industry, the machinery industry should take on significant responsibilities in implementing the strategy of becoming a manufacturing powerhouse.
Wang Ruixiang emphasized that in implementing the strategy of becoming a manufacturing powerhouse, we should focus on intelligent transformation, closely relying on national special projects, using the intelligentization of major products and complete sets of equipment as a breakthrough, and promoting the popularization of smart factories as a starting point. We should promote the penetration of information technology, digital technology, network technology, and artificial intelligence into design, production, management, service, and market segments, drive the intelligentization of machinery products, promote the transformation of production methods towards flexibility, intelligence, and precision, and encourage the innovative development of new manufacturing models such as Internet+ manufacturing and manufacturing IoT. We should accelerate the development of service-oriented manufacturing, extend the industrial chain, increase economic added value, actively participate in national special planning pilot implementations, and strive to seize opportunities in the new round of industrial transformation. We should vigorously implement the innovation-driven strategy, actively address key core technologies, components, and equipment with weak foundations, as well as substitute imported products and equipment, focusing on emerging industries such as robotics, and play a leading role in the increasingly differentiated machinery industry, continuously promoting localization and independent innovation. We should pay attention to standards and quality improvement, adhere to the principle of standards first, quality support, and brand foundation, produce more high-quality products, create more quality services, and undertake more quality projects to continuously meet the increasing market and consumer demands. We should focus on talent, management, and corporate culture construction, continuously enhance soft power and comprehensive competitiveness. Based on thorough risk prediction and prevention, we should boldly implement the "going out" strategy, strive for initiative and discourse power in international capacity and equipment manufacturing cooperation, and showcase new achievements in international market competition. In short, industry enterprises should have great ambitions, take the lead in practice, be brave in innovation, accumulate experience, and play a good supporting role in promoting the transformation of the machinery industry from large to strong.
recommend News
CHINAPLAS 2024 International Rubber and Plastics Exhibition shines at its opening!
Guangdong Zhenxiong is located at booth B91 in Hall 3, where we are demonstrating our latest developed "GFTW-1300X High-Speed Horizontal Slitting Machine". This showcases equipment that is more economical and efficient, pushing the production workshop towards a more automated direction. We welcome all new and old customers to visit and provide guidance! We will offer you more comprehensive and high-quality equipment technical solutions, and we look forward to meeting you!
2025-07-28
2022 Spring Festival Equipment Maintenance Plan
As the Spring Festival approaches, Guangdong Zhenxiong Machinery Co., Ltd. extends warm greetings and sincere thanks to you from all employees, expressing gratitude for the support and recognition from the leaders towards our company...
2025-07-28
The 5th China Tongcheng (Xindu) Plastic Packaging Machinery Exhibition in 2021 will be held from October 18 to 20, 2021, at the Runzhicheng Exhibition Center in Area B of East China Plastic City. Guangdong Zhenxiong sincerely invites all leaders and friends to visit our booth for discussions!
2025-07-28
Contact Us
Guangdong Zhenxiong Machinery Co., Ltd.
Telephone:（86）768-6667818 （86）754-82121818
Address: Daqiao Industry zone, Chaozhou City, Guangdong province, China
Fax: +86-0768-5920023
E-mail:380098151@qq.com
WhatsApp:+86 188235011111
OFFICIAL ACCOUNTS
Public Number
MINI-PROGRAM
Small program
All rights reserved©Guangdong Zhenxiong Machinery Co., Ltd.