Smooth and healthy development of machinery industry, the industry's main economic indicators better than expected

Since the beginning of this year, the entire machinery industry maintained a steady and healthy development. The major economic indicators of the industry were better than expected, reversing the year-on-year decline in the growth rate of foreign trade's imports and exports. According to statistics provided by China Machinery Industry Federation, from January to July this year, the total import and export volume of the machinery industry was 395.439 billion U.S. dollars, up 8.91% over the same period of previous year. Of this total, the import was 167.816 billion U.S. dollars, up 11.78 percent over the same period of last year; the export was 227.623 billion U.S. dollars, up 6.88 percent over the same period of last year; the trade surplus was 59.8 billion U.S. dollars, reversing the year-on-year decline in the growth of the import and export of machinery industry in the previous year.

From January to August, the added value of machinery industry increased by 11.0% from the same period of previous year, up from 4.3 and 3.8 percentage points of the national industry and manufacturing industry over the same period respectively, 2.3 percentage points higher than that of machinery industry in the same period of last year. From January to July, the revenue from main operations reached 14.63 trillion yuan, up 11.37% over the same period of previous year, 4.46% higher than the same period of last year; the total profit was 995.359 billion yuan, up 14.31% over the same period of previous year, 7.72% higher than the same period of last year. "This year, it has a close relationship with the consumer market and is related to environmental protection and green manufacturing. It is related to the transformation and upgrading of the smart manufacturing industry and the rapid growth in output of machinery and industrial products related to infrastructure construction and key state-of-the-art projects." China Machinery Industry Federation President Wang Ruixiang said that from January to August, the machinery industry focused on monitoring 119 kinds of major products, the output increased by 91 species, accounting for 76.47%, of which 42 kinds of products from the previous year's output YoY decline to YoY growth. Automobile production and sales completed 17.678 million units and 17.511 million units respectively, representing increases of 4.7% and 4.3% over the same period of the previous year respectively.

Industrial enterprises continued to improve the efficiency. From January to July, the internal combustion engines, construction machinery and instruments increased 21.5%, 14.93% and 15.28% respectively over the same period of last year from the first quarter of 2014. The growth rate ranked the top three in the industry. The profits of the three industries increased by 58.18%, 81.2% and 30.48% respectively over the same period of last year. In terms of new revenue from main operations, non-automotive industry accounted for 64.69% of the total, up 16.69 percentage points over the previous year. In terms of newly added profits, the non-automobile industry accounted for 65.64%, up 14.68 percentage points over the previous year; the automotive industry accounted for 34.36%; and the electrical and electronics industry accounted for 13.7%.

However, it should be noted that the growth rate of fixed asset investment in the industry is still running at a low level. From January to July, the total investment in fixed assets in the machinery industry was 2.81 trillion yuan, up 3.42% from the same period of last year and 1.19 percentage points lower than that in the first half of the year. The price index rebounded slowly. In the first half of this year, the producer price index of machinery manufacturers rose by 5.5% over the same period of previous year. Cost pressure is still large, mainly reflected in the rapid growth of labor costs, financing costs, energy costs, logistics costs and raw materials prices. From January to July, the cost of main business of machinery industry increased by 11.52% from the same period of previous year, an increase from the same period of last year. At the same time, structural contradictions accumulated in the industry have not been fundamentally changed. Market downturns, lack of orders, overcapacity in some sectors, and slow industrial, technological and private investment have constrained the quality, efficiency and upgrading of the machinery industry.

Wang Ruixiang predicts that the machinery industry will continue its good operation in the whole year. The value added or growth of the industry will be around 8%. The main business revenue and total profit will increase by about 8%. The export of the industry will grow moderately.