In the first seven months of 2018, the sales of various types of construction machinery have shown a steady growth trend, and the overall high-light situation has been established. Therefore, we shifted our focus to the future and wondered how long the good boom of construction machinery would last. Through the analysis of various research institutions, we concluded that based on the six major factors of equipment inventory updates, new equipment demand, and enterprise development, the construction machinery industry is expected to maintain stable growth in the next three years. Replacement of existing equipment Research data shows that 80% of the future demand for construction machinery comes from the replacement and upgrading of equipment. This part of the demand is relatively stable and has less downside risk. In general, the life cycle of construction machinery products is 8-10 years. The last sales peak was around 2011, and 2017-2019 is the peak stage for equipment to be eliminated and replaced. According to statistics, there are currently over 7 million units of construction machinery in the market, and about 2.4 million units of old equipment are facing elimination. This provides market space for new machine sales and further boosts industry demand. At the same time, both the national and local governments have increasingly strict requirements on environmental protection. Most of the existing equipment in the market belongs to emissions of China II and China III. Even if it is not at the age of machinery, it may be banned due to environmental considerations. Therefore, environmental policies and machinery age have further expanded the demand for replacement of construction machinery. Policy-driven infrastructure investment may pick up In the first half of 2018, China's fixed asset investment growth rate was 6%, and infrastructure investment increased by 7.3%, which was significantly lower than expected, which also affected China's overall economic development to some extent. Therefore, at the end of July, the State Council meeting and the Political Bureau meeting put forward the development tone of "guaranteeing infrastructure investment". More proactive fiscal policies and a pick-up in PPP project investment, coupled with loose monetary policy, fully guaranteed the smooth progress of infrastructure projects, and also eased investors' concerns about slowing industry growth. According to years of development experience, China's construction machinery sales are positively correlated with fixed asset investment. It is expected that with various infrastructure projects being implemented in September, the construction machinery industry will bring actual sales growth. Mechanization replaces manual labor and construction machinery penetration rate continues to increase In recent years, with the aging population and labor shortages in China, labor costs have increased significantly, and there has been a clear trend of mechanization replacing manual labor. In the past, road expansion, farmland construction, water conservancy facilities construction and other basic rely on labor in rural markets in China. However, now there is a lack of young labor in rural areas, and most young people are reluctant to do this work. Manual costs have risen大幅上涨, giving rise to a trend of replacing manual labor with machines. In the past, China's excavator ownership per capita was relatively low, but in the future, the penetration rate of construction machinery is expected to continue to increase. Not only in the field of construction machinery, but also in all fields of industry, there is a clear trend of replacing manual labor with machines. Mining investment recovery provides new growth momentum After the 2008 financial crisis, global economic growth stalled leading to a decline in mineral resource demand and a general trend of stagnation, investment decline and capacity liquidation in the global mining industry. However, since 2017, there has been a回暖趋势in global mining industry. Taking China's data for the first half of 2018 as an example, from January to June, industrial added value in China increased by 6.7% year-on-year. Among them, mining industry added value increased by 1.6%, an increase of 0.3 percentage points; mining industry investment reversed its decline and increased by 0.2% year-on-year. The recovery of mining industry has important significance for boosting demand for mining equipment. In the past, mining equipment has been monopolized by foreign companies such as Caterpillar and Komatsu. However, in recent years, with the development of construction machinery in China, construction machinery enterprises such as XCMG and Sany have continuously improved their competitiveness in producing mining equipment, opening up the market for mining machinery and facilitating entry of domestic equipment. Overall strength improvement and export growth The improvement of China's construction machinery industry not only increases its domestic market share but also has a significant effect on opening up overseas markets. The countries along the Belt and Road have become the most important target markets for Chinese construction machinery