Machinery demand to contract next year

By Lee Spears  |   2008-11-7  |     NEWSPAPER EDITION

CHINA'S demand for construction machinery will contract next year as fixed-asset investment growth declines, Credit Suisse Group AG said.

Demand growth will be negative for five of six major types of construction machinery, analyst Victoria Li said in a note to investors yesterday.

China's fixed-asset investment growth adjusted for inflation may fall to 10 percent next year after registering an estimated 14 percent this year, according to the note obtained by Bloomberg News.

Chinese makers of earth-moving equipment, including Guangxi Liugong Machinery Co and Changsha Zoomlion Heavy Industry Science and Technology Development Co, recorded falling sales for some types of machines last month, the note said.

If approvals for newly planned projects are slow, demand may not rebound until the fourth quarter of next year, it said.

The biggest decline in equipment demand is likely to be for concrete pumps, which may contract by 25 percent next year after expanding 20 percent this year.