(Yicai) July 8 -- Positive signs of growth in China’s infrastructure investment have appeared after a sluggish first five months to the year that resulted from adverse weather and policy adjustments.

Sales of excavators, often considered a barometer for infrastructure investment, reached 25,445 units last month, a 35 percent jump from a year earlier, according to data released yesterday by the China Construction Machinery Industry Association.

 

The National Development and Reform Commission, the state planner, also recently issued this year’s third batch of projects for advancing major national strategies and key areas of security capacity building, allocating CNY193.5 billion (USD28.5 billion) in funds from the sale of ultra-long special treasury bonds. So far this year, CNY800 billion has been earmarked for 1,417 major projects.

 

The business activity index for the civil engineering and construction industry rose to more than 55 in June, up more than 3 points from May, according to figures published by the National Bureau of Statistics. The new orders index rose above 51, ending a streak of 11 consecutive months under 50 — the boom or bust line, the data also showed.

In the January to May period, China’s fixed-asset investment fell 4.1 percent from a year earlier, though infrastructure investment rose 0.6 percent, and within this category investment in the information transmission sector surged by more than 30 percent, while investment in water transport jumped over 23 percent.

The decline in the first five months was partly down to high temperatures and heavy rainfall in some areas, as well as the transition between old and new growth drivers, but the investment structure has continued to improve, said NBS official Fu Linghui.

Wang Qing, chief macro analyst at Golden Credit Rating International, told Yicai that given the policy stance aimed at halting the decline and steadying investment this year, fixed-asset investment is expected to gradually return to positive territory. 

The recent dropoff was mostly due to policy adjustments, Wang said, and it is expected that there will be room for acceleration in infrastructure investment in the second half, with a likely full-year growth rate of around 4 percent to 4.5 percent.

Editor: Tom Litting