Access full text reports, backup data, and more.
With Chinese consumers holding on to their wallets (See China SignPost 60), the People’s Republic of China (PRC)’s near-term economic fate hinges heavily upon its real economy, which still revolves around heavy industrial activity. This means excavating and building, burning coal, making steel, and so forth. The latest earthmover sales data are not quite as deeply negative as they were late in the first quarter of 2012, but they remain weak, with sales of excavators, a bellwether for construction activity, down 20% year-on-year (“YoY”) in June and down by 28% YoY in July. The structural trend looks bad as well, with the 12-month rolling sales figure still declining, albeit less sharply than it was earlier in the year (Exhibit 1). Exhibit 1: China domestic excavator sales, 12-month rolling average Machines…