Mechanical excavators work in a quarry near a China-backed new international airport being built in Siem Reap, Cambodia on Saturday. The stones will be used for local infrastructure projects, which are gaining steam as locally operated Chinese firms strive to resume work while containing the coronavirus. Photo: cnsphoto

Graphics: GT

 

Propelled in part by the largest buying spree of the year, China's excavator index is reflecting optimism over near-term economic growth, especially in infrastructure and real estate, according to experts. 

According to the China Construction Machinery Association, sales of excavators from the surveyed companies rose by 60.5 percent in October compared with the same period last year, and in the first 10 months of this year, sales grew 34.5 percent year-on-year. Total sales of excavators of this year are expected to reach 31,500.

Liugong Machinery Co, one of the industry's bellwethers, told the Global Times that in the third quarter, revenue jumped 18.9 percent year-on-year to more than 5.3 billion yuan ($802.6 million). 

Long seen as an indicator of infrastructure activities, rising production and sales of excavating machineries reflect increasing confidence in China's economy in the near future. This is especially true of sectors that were forced into hiatus during the COVID-19 epidemic such as construction, Tian Yun, vice director of the Beijing Economic Operation Association, said.

"Sales of excavators have been on the rise since May," Tian noted, "and as infrastructure construction picks up, demand will continue to rise in the next few months."

Despite being hit by the coronavirus epidemic, investment in real estate development in the first three quarters of this year rose 5.6 percent. Out of 34 provincial-level regions, 26 recorded growth, according to the National Bureau of Statistics. 

However, this month, sales of excavators are also being propelled by the e-commerce shopping festival set to officially start on Wednesday. 

According to Alibaba, orders for small excavators rose by almost 150 percent year-on-year on the presale day of the Double Eleven shopping festival. East China's Shandong Province, where most of the excavator makers are, contributed 90 percent of the sales. 

"We have very good sales online, and we have been preparing for the Double Eleven shopping festival alongside our physical sales," a company representative from Liugong said. 

Machinery companies have increasingly turned to e-commerce since the start of the pandemic. Sunward Intelligent, another heavy machinery manufacturer, sold 260 million yuan worth of machinery online in the first half of this year.

Also, seven of the country's biggest machinery companies have launched stores on the international site of Alibaba, according to a statement sent from the e-commerce platform.