Chart of the Day: Excavator Sales Surge Hints at Rising Infrastructure Investment

A total of 18,745 excavators were sold in China last month, more than in any February since 2011, which analysts argue is likely driven by increasing infrastructure investment.

Last month’s figure was up 68.7% from a year earlier, according to data released by the China Construction Machinery Association. Breaking down the increase, domestic sales were up 77.7% to 17,286, and exports were up 5.2% to 1,459.

Accelerating infrastructure construction likely contributed to expanding demand for excavators, which could bolster the overall investment sector in the first quarter or even first half of 2019, according to a report by CEBM Group, a subsidiary of Caixin Insight Group, on Wednesday.

Last year’s low comparison base, machinery upgrading and businesses preparing for the peak sales season in March also boosted February sales this year, the report said.

China’s policymakers are hoping an uptick in infrastructure investment can bolster the country’s slowing economy. The country’s local governments started infrastructure borrowing in January, months ahead of the normal schedule, as part of the central government’s initiative to boost investment. Last week, Premier Li Keqiang said around 2.15 trillion yuan ($320 billion) worth of local government special-purpose bonds will be issued this year to support financing for infrastructure projects, up from last year’s 1.35 trillion yuan.

Contact reporter Liu Jiefei (jiefeiliu@caixin.com)