Slowing Growth for Chinese Machine Production

Outlook remains positive due to industrialization policies, urbanization

China’s industrial machinery manufacturing industry is slowing down, according to a new research report that found the rate of revenue growth among companies in that sector declining from 2010 to 2011. However, the IMS Research study, The China Machinery Production Yearbook, 2012 Edition, also found that revenues for Chinese machine builders will grow at an average annual rate above 13% to total more than $627 billion by 2016.

Specifically, IMS reported that China’s industrial machinery producers’ combined annual revenues increased 28.2% in 2010, but the same group’s revenues increased only 17.6% in 2011, to total $335 billion.

IMS stated it is maintaining a positive outlook for China’s industrial machinery sector because of the country’s ongoing industrialization and urbanization trends. As China emphasizes its manufacturing industries, the prospects for continued expansion remain very good, according to the researchers.

The current year’s rate of growth is forecast at 13.3%, and projected to bring revenues of more than $380 billion to Chinese machine builders.

IMS Research analyst Jay Tang said the slowing is due to some familiar factors. “Because of economic turmoil in Europe and weakening demand and tighter monetary policies at home, the growth of Chinese machine production is slowing down and entering a period of steady growth,” according to Tang.

“Of the machinery sectors analyzed, production of material-handling machinery had the largest revenues in 2011, $70 billion or 20% of the total,” Tang said. “The next largest sectors in China were production of agricultural machinery, machine tools, wind turbines, and textile machinery.”

Among all of China’s machinery sectors for 2010, machine tool production was the largest, with over $3.4 billion in revenues. Material handling machinery was the next largest, followed by wind turbines and textile machinery.

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