No rebound for machinery made in China
The Chinese machinery industry has to affront a difficult time with head winds vreated by he slowdown of the economy
Chinese machinery manufacturers report for 2012 and actually and they tried to keep sales on track by offering lower terms to customers. Across the sector – according to a Wall Street Journal report –accounts receivable stretched to 124 days in the fourth quarter 05 2012, up from 73 days a year earlier. It was expected that the strain on receivables would unwind, once the economy would pick up steam and customers would then buy more equipment and cash would start flowing through the system again.
As we all know the first quarter of 2013 brought no remedy to the situation and GDP Gross Domestic Product suggests that the recovery took a retreat. The entire sector of heavy equipment for construction is suffering due to the dampening measures ordered by the central government in realty investments.
The table of Wall Street journal gives a good impression of the development in the heavy machinery sector in China.
It is worthwhile to note that also textile machinery manufacturers are meeting growing difficulties, because of the difficulties of the customers to finance the project. Prominent machine players in the market have therefore lowered their estimated sales figures, at least in the first half of 2013. The slowdown of the economy, as described before has also led to cancellation of projects. The straight export business from industrialized countries to China is suffering foremost. Of course, we hope for the sake of the sector that this development is coming to a halt when the Chinese economy is taking off again and also the construction sector is coming to terms. All in all a lot will depend on how the Chinese central government and the central bank will allocate the financial means, as well as the incentives announced to modernize the Chinese textile and clothing industry with more sustainable state-of-the-art machinery.