As one of the typical manufacturing industries, the machinery industry continued to hover at a low level in July. The latest statistics show that the production and sales of major machinery products in July declined to varying degrees compared with the previous month. The output of industrial boilers, metal-cutting machine tools, and tractors decreased by 10.4%, 13.43%, and 12.8% month-on-month respectively, with the declines widening. Affected by the previous economic downturn, terminal demand for major machinery products was weak, leading to large inventory backlogs. In addition, tight credit also affected the industry's production and operation. For the steel industry, as the second-largest steel user after real estate, the production and operation of the machinery industry also constantly affect the performance of the steel market. With a series of measures to stabilize growth introduced since the second half of the year, the machinery industry is expected to recover slightly from the original basis, and its support for the steel market will be better than in the first half of the year.

　　"Insufficient domestic demand and weak external demand" was the impression left by the machinery industry in the first half of the year, and in July, this situation still did not improve. Under this influence, the output of major products declined month-on-month. According to data from the National Bureau of Statistics, in July, the output of industrial boilers was 44,000 tons of evaporation capacity, a year-on-year increase of 3.1%, with the growth rate significantly lower than the previous month, while the month-on-month decline was 10.4%, turning negative again after April this year. Overall, although the industry's output declined slightly, as important thermal power equipment, the market demand for industrial boilers still has considerable room. In the future, the development of the natural gas industry and the renewal of energy-saving and environmental protection equipment will provide opportunities for the industry's development.

　　The performance of machine tools was also not ideal. In July, China's output of metal-cutting machine tools was 58,000 units, flat year-on-year, while the month-on-month decline expanded from 1.47% last month to 13.43%. From January to July, the cumulative output of metal-cutting machine tools was 420,000 units, a year-on-year decrease of 5.8%, with the decline slightly narrowing from the previous month. According to machine tool enterprises, new orders continued to decline in July, with some enterprises reporting a decline of around 20%, about 50% lower than the peak in 2010 and 2011. Almost all enterprises reported that order volumes have basically stabilized at this level. From the perspective of the entire downstream industry, automobile manufacturers are still the largest source of demand.

　　In terms of agricultural machinery, in July, China's tractor output was 178,000 units, a year-on-year increase of 10.5%, with the growth rate declining for three consecutive months, although the overall growth level was significantly better than last year. On a month-on-month basis, July saw a decline of 12.8%, with the decline slightly widening from the previous month. From January to July, China's cumulative tractor output was 1.48 million units, a year-on-year increase of 27.7%. Structurally, the growth rate of small tractors, which account for a larger proportion, was relatively low, but still in a downward trend. In July, the output of small tractors was 146,000 units, a year-on-year increase of 4.3%. Although the output of medium and large tractors declined month-on-month, their year-on-year growth rates expanded, reaching 16.2% and 19.8% respectively, which may be related to the low base in the same period last year. Overall, the agricultural machinery market performed reasonably well this year under the strong stimulus of agricultural support policies. However, factors such as lagging agricultural machinery subsidies and reduced rigid market demand are affecting the performance of the agricultural machinery industry. The probability of maintaining high growth in the future is not high; more likely, it will be mainly structural upgrading.

　　The performance of mechanical equipment was mixed, with metal smelting equipment growing significantly better than packaging and feed equipment. According to data from the National Bureau of Statistics, in July, the output of metal smelting equipment was 77,000 tons, a year-on-year increase of 31.4%, with the growth rate down 0.4 percentage points from the previous month, but the overall level remained high. In July, the output of special packaging equipment was 8,965 units, a year-on-year increase of 8.5%, and a month-on-month decline of 5.9%, with the decline slightly widening from the previous month. In July, the output of feed production equipment was 31,000 units, a year-on-year decrease of 26.3%, with the decline expanding for three consecutive months.

　　The construction machinery industry has shown a weak recovery trend since the beginning of this year. July, as the off-season, did not see much improvement in sales. According to the latest statistics from the industry association, in July, 28 major excavator manufacturers sold a total of 6,351 excavators, a year-on-year increase of 8%, with the growth rate up 7.4 percentage points from June. From January to July, the cumulative sales of the excavator industry were 75,305 units, a year-on-year decrease of 10.88%, with the decline showing a trend of improvement. On a month-on-month basis, excavator sales fell 24% in July, in line with seasonal characteristics, but the decline narrowed compared with the previous three months. This improvement was mainly driven by the sales of foreign brands last month.

　　Structurally, in July, small, medium, and large excavators accounted for 38%, 43%, and 14% respectively. Demand for large excavators continued to rise, up 3 percentage points month-on-month, while the share of small excavators continued to decline, down 3 percentage points month-on-month. However, in the second half of the year, with the demand support from urban infrastructure and the development of the agricultural machinery industry, the trend of the small excavator share is expected to improve.