In 2014, machinery production in China is forecast to expand 7.4 percent, a slowdown from 7.9 percent growth in 2013, according to the quarterly tracker for Chinese Machinery Production from IHS Inc. Economic activity in China remained weak, albeit stable, in May despite a strongly improving export environment, highlighting the considerable and persistent drag from the housing market downturn. Although real export growth jumped, real measures of investment and retail sales all showed neutral to negative changes relative to April. Industrial production saw only a meagre acceleration, despite a number of signals from leaders for targeted stimulus measures, and a clear easing of financing conditions.
The IHS Q2 study continues to show downward revisions to the 2014 and 2015 forecast for Chinese machinery production. In 2013, many industries in China, including construction machinery, metal cutting, and metal working, were still struggling with over-capacity. IHS believes it will take some time to solve the problem. However, some industries serving domestic consumption grew in 2013; they included agricultural machinery; elevators & escalators; electronics & electronics assembly; oil & gas; medical & scientific; food, beverage & tobacco machinery; and packaging machinery. Because of weak investment in 2013, most heavy industries, including mining machinery and crane & hoists, declined. However, the wind turbine industry rebounded strongly, because of increasing grid-connected power from wind turbines. In contrast, PV manufacturing equipment recovery tended to lag behind the recovery of PV industry.