[Special Topic] Operation Analysis and Prospect of Concrete Industry in 2023

First, the demand for housing construction continued to shrink, and the output of commercial mixed products declined significantly

. In 2023, the overall domestic economy rebounded, the pressure on economic operation in terms of increment eased slightly, the quality improvement work was steadily promoted, and the task of local governments to prevent and resolve debt risks was more urgent. Against this background, the proportion of government expenditure to GDP declined throughout the year, and the intensity of infrastructure investment actually weakened. In 2023, domestic infrastructure investment (excluding power and other industries) increased by about 5.6% year-on-year, and the growth rate was about 3.8 percentage points lower than that in 2022, basically in the medium-speed growth range. Among them, investment in railway transportation industry grew rapidly, maintaining a growth rate of more than 20%, water conservancy management industry grew by nearly 5% year-on-year, while road transportation industry showed a relatively weak performance, with negative investment growth.

Meanwhile, the total amount of real estate investment in 2023 is about 11 trillion yuan, with a year-on-year growth rate of about-9.5%, and the decline in investment is still more obvious. Despite the government's continuous release of favorable policies in the real estate market, consumers'willingness to buy houses is still weak due to multiple factors such as price pressure, delivery risk and scar effect, which fails to reverse the downward trend of the real estate industry. Due to the lack of their own hematopoietic capacity, external financing is still relatively difficult, the shortage of funds continues to plague real estate enterprises, coupled with the heavy task of destocking and guaranteeing the delivery of buildings during the year, the focus of work is mainly on the completion end, incremental indicators such as land acquisition and new construction continue to shrink, and the actual amount of commercial mixing is further reduced.

Figure 1: Real estate investment continues to decline, infrastructure growth falls year-on-year (%)

Data source: Cement Big Data (https://data.ccement.com/)