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MIIT:FAI in building materials industry grows rapidly in first 5 months
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13:37, June 25, 2009

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Ministry of Industry and Information Technology (MIIT) said that from January to May this year, the building materials industry received 183.8 billion yuan fixed assets investment (FAI), up 56.2 percent, an increase of more than 11 percent over the same period last year.

Among them, products with a faster growth rate of investment are: fixed asset investment in cement manufacturing up 78.6 percent year on year; fixed asset investment in cement products rose by 72.7 percent; investment in other non-metallic mineral product manufacturing grew by 88.2 percent; building stone processing investment witnessed 62.9 percent year-on-year growth.

In addition, the real estate market saw signs of recovery, thus leading to rapid growth of consumer goods such as furniture. Statistics show that in May, retail sales of furniture rose by 33.3%. Production of furniture grew by 3.8 percent in May.

Key factors that attribute to fast growth of fixed-asset investment in the building material industry are:

First, it benefited from the government's series of measures to "maintain growth, expand domestic demand, and structural adjustment." Among the 4 trillion yuan investment, 230 million is for construction of railways, highways, airports, ports and other infrastructure facilities and low-cost housing. These investments directly promote demand for building materials. Cement consumption increased by 500 million tons alone.

Second, in recent years, economic benefits of the vast majority of building materials products continued to increase.

Total profit of the building materials industry in 2007 reached 88 billion yuan, an increase of 46 percent year on year. Despite the international financial crisis in 2008, there is still a total profit of 110 billion yuan, a year-on-year increase of 25%. In the first five months of this year, overall economic benefits of the building materials industry basically stabilized. Improved return on investment makes domestic and foreign investors optimistic about China's building materials industry, and increases their willingness to invest.

Third, the reconstruction of post-earthquake Sichuan highlights the demand for building materials.

Affected by the reconstruction of earthquake hit areas in 2008, sales of building materials such as cement, glass, construction ceramics and wall materials in Sichuan Province was booming. In the first four months this year, cement production in Sichuan Province rose by 37 percent, and there is 8.5 percent growth in flat glass production, 44.3 percent growth in architectural ceramics production, and wall materials output witnessed 119% growth. Production of building materials in surrounding provinces and cities such as Gansu, Shaanxi, Chongqing and Guizhou have also increased significantly.

By People's Daily Online

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