Lonking issues profit warning as Chinese construction growth slumps
One of China’s biggest construction machinery manufacturers has warned that weakening demand will slash its profits in the first half of 2012. In a statement, Lonking said that it is facing a substantial decline in its net profit as China reduces the scale of building following the completion of the first phase of its 2009 […]
Lonking has been making ground in the Middle East
One of China’s biggest construction machinery manufacturers has warned that weakening demand will slash its profits in the first half of 2012.
In a statement, Lonking said that it is facing a substantial decline in its net profit as China reduces the scale of building following the completion of the first phase of its 2009 stimulus plan.
Government investment has helped place China as the world’s biggest construction market, boosting domestic and global manufacturer fortunes.
Looking ahead the company said that it “expects significantly lower rates of growth in demand for construction machinery as compared with prior comparable periods”.
“Since December 2011, domestic demand for construction machinery has continued to weaken,” said Lonking. “This reflects slower growth in China’s fixed asset investment, the changes in (the) macroeconomic environment resulting in fewer infrastructure projects, as well as the completion of projects funded by the 2009 stimulus plan.”
Despite Lonking’s gloomy outlook, there are suggestions that the Chinese government is ready to pump money back into its stalling economy. Credit Suisse has claimed that a new stimulus program of $315 billion is on its way, approximately half the amount announced in 2008.
