In the first quarter of 2013, due to the large existing market inventory and limited stimulus from downstream infrastructure investment, demand for new construction machinery remained weak. To control costs and reduce capital tied up in finished products, major companies prioritized destocking and adopted a relatively cautious approach to production. Taking excavators and loaders as examples, the cumulative output in the first quarter was 38,225 units and 47,199 units respectively, representing year-on-year decreases of 32.3% and 14.4%. The decline in excavator production widened by 10.7 percentage points compared to the same period last year, while the decline in loader production narrowed by 6.3 percentage points.
The past 20 years have seen the fastest increase in China's urbanization rate, rising from 27.99% in 1993 to 52.57% in 2012. This rapid increase in urbanization led to a significant increase in demand for construction machinery, which was the biggest backdrop to the golden decade of China's construction machinery industry. Experiences from the United States, Japan, and Brazil show that urbanization rates, after exceeding 50%, can maintain high-speed growth for nearly 20 years, only gradually slowing down after exceeding 70%. Vigorously promoting urbanization has become a governing goal of the new government. The initial draft of the "Plan for Promoting Healthy Urbanization Development (2011-2020)," led by the National Development and Reform Commission, has been completed and will be released soon. It is foreseeable that within the next 20 years, my country's urbanization rate will likely reach 70%.
