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Fan industry shows signs of slowing down in inertial growth market
At the sixth general meeting of the China General Machinery Industry Association's Fan Branch, held in Dalian from July 5th to 8th, it was revealed that the fan industry has experienced a decline in orders during the first five months of this year due to national macroeconomic controls. Despite this, the sector continues to show inertial growth, supported by its critical role in key national projects such as oil, chemical, coal, metallurgy, power, mining, textiles, environmental protection, and scientific research.
According to statistics from the wind turbine branch, the industry saw an 11.45% year-on-year increase in total industrial output value (current price) at 97.7 billion yuan, with sales output rising 11% to 85.17 billion yuan. Export delivery value reached 23.99 billion yuan, up 11%, while industrial added value increased by 20% to 30.64 billion yuan. Main business income rose 15.69% to 83.43 billion yuan, and total profit grew 9% to 53.61 billion yuan. However, cumulative orders fell by 2% compared to the same period last year.
The industry’s continued growth is attributed to its broad product range and the steady development of the Chinese economy. Additionally, many manufacturers carried over contracts from the previous year into the first half of this year, contributing to the overall growth. Nevertheless, the industry remains uneven, with some companies showing strong growth, while others faced declines.
Another notable trend is the increase in finished goods inventory and a lower production-to-sales ratio of 87.1%. This is partly due to companies adjusting production schedules to avoid concentrated deliveries later in the year, as well as delayed payments from customers and project cancellations caused by policy changes. These issues are expected to ease as the second half of the year progresses.
Market demand also showed a slight decline, particularly affecting medium-sized companies, which saw significant order reductions. In contrast, larger manufacturers like Shengu, Shaanxi Drum, and Zhongtong maintained stable order levels. The industry’s focus on new products has declined, with output value falling by 12.17%, highlighting the need for stronger innovation.
While exports increased by 20% year-on-year, this growth was largely due to a low base in the previous year. Overall, exports still account for only 2.4% of total output, indicating limited international reach. Some key enterprises have been affected by restructuring, and urgent measures are needed to stabilize their performance.
Currently, most export products are small and medium-sized fans, primarily sold to developing countries. Looking ahead, the focus should remain on small and medium-sized turbines. Meanwhile, there is growing demand for specialized fans, such as corrosion-resistant, high-temperature, and explosion-proof models, made from advanced materials.
Overall, the fan industry remained in a healthy state during the first five months of the year, maintaining modest growth and improving economic performance. It is expected that this positive momentum will continue into the second half of the year, with major indicators showing improvement. The industry is likely to experience another year of steady and healthy growth in 2006.