In 2023, China’s GDP is expected to grow by 5.2% year-on-year, the economic repair is slow, the recovery of the consumer market is less than expected, and end users are in a wait-and-see

state; Infrastructure investment continued to gain momentum, and the growth rate gradually slowed down. Overall, the market has not improved significantly.

1769-IQ6XOW4  A modest recovery in economic growth:

Real GDP growth is expected to reach 4.2% in 2024, a slight increase from the compound growth rate of 4% in the previous two years.

The internal driving force of consumption will continue:

Similar to 2023, consumption growth in 2024 is still driven by income growth.

Property decline Narrows:

In 2024, it is predicted that real estate investment will decline to about 7% in 2024, 1769-IQ6XOW4  narrowing from the decline in 2023, mainly due to policy support for the renovation of urban villages and the construction of affordable housing.

Figure 2: China’s discrete automation (FA) market size, by quarter, 22/2023 (billion yuan)

Data source: Gewu Shengsheng collated according to public information

2023 Q3GDP growth of 4.9%; GDP is expected to grow by about 5.2% in 2023. Q3 quarter growth and future economic growth less than expected, the overall market expectations lower; From the perspective of the downstream industry, the project-based market is still the main driving market for Q3, and the traditional market demand of the OEM market continues to be weak.

OEM market: The traditional OEM textile, packaging, printing and other industries have a low boom, only the food and beverage industry has a slight improvement, the new production line of the lithium industry has reduced, and the industry has a certain contraction; Lifting, construction, HVAC and other industries due to the downturn in the real estate market, there is a certain contraction.

EU market: electricity, oil and gas, municipal sewage treatment industry is developing well.

In November of Q4 2023, the added value of industrial enterprises above designated size increased by 6.6% year-on-year; From a month-on-month point of view, in November, the industrial added value above designated size increased by 0.87% over the previous month. From January to November, the value added of industrial enterprises above designated size increased by 4.3 1769-IQ6XOW4  percent year-on-year. Under the background of the low base of Q4 in 2022, Q4 in 2023 showed an improvement trend and the decline rate narrowed. For the full year, the industrial automation market declined by about 2%.

Figure 3: Market Size of discrete automation (FA) in China, 22/2023 – by product (billion yuan)

Data source: Gewu wins interviews and industry accumulation

Low voltage frequency converter

The project-based market is still the main driving market for Q3, and the traditional market demand in the OEM market is still weak; Domestic substitution continues, and the share of foreign brands continues to decline.

servo

Consumption recovery less than expected, OEM end-user equipment and production line 1769-IQ6XOW4  investment are wait-and-see attitude, market demand continues to decline; The traditional downstream industries are limited in export, weak domestic demand, and the market is declining rapidly, such as packaging, textile, printing, etc. In emerging markets, the background of rapid decline in policies and costs, the photovoltaic industry has shown rapid growth.

PLC

In 2023, the project-based market continued to develop, but the growth rate slowed down, and the medium and large PLC market increased slightly; The OEM market performance is poor, and the demand for small and medium-sized PLC products continues to shrink.

Figure 4: Discrete Automation (FA) Market size in China, 22-2023 – By Industry Category

Data source: Gewu wins interviews and industry accumulation

From the industry point of view, 2023 project market performance is better, the growth rate of about 2%; The OEM market is in decline.

Figure 5: China’s discrete automation (FA) market size in 2022/2023 – Project type market (billion yuan)

Data source: Gewu wins interviews and industry accumulation

In 2023, the project-based market will lead the main growth, such as metallurgy, oil and gas, water industry, transportation vehicles, public facilities and other industries; In addition, in the basic industry, the performance table of data center, 5G new infrastructure and other markets is outstanding; The real estate industry continues to slump, and the market for related products continues to decline, such as cement, lifting, elevator and other industries.