Domestic construction hardware companies face transformation

Business is not very good! This is a collective sigh issued by a large furniture city window and door dealer on the edge of the Fourth Ring Road in Beijing. Although it is on the weekends, as usual, the furniture gates can be quite the same. The same scene also appears in the building materials market that separates them all the way. A plumbing hardware store operated by Chen Xing’s distributor has not been opened for a few days. The turnover has been on a downward slope since the second half of last year, and it has plummeted after the Spring Festival. There are still some retail businesses, but there is no single purchase business. After that, I can only cancel the sales agreement with the manufacturer in advance. Dreary and huge inventory pressure has exacerbated the pessimism of downstream practitioners in the hardware industry.

A few days ago, the "Twelve Five-year Development Plan for the Building Materials Industry" released by the Ministry of Industry and Information Technology shows that during the Eleventh Five-Year Plan period, China's building materials industry had the fastest development speed and the best quality and efficiency for five years. However, with the credit crunch and slower investment growth, the demand for building materials in China will hardly maintain the momentum of high growth in the next few years. The Twelfth Five-year Development Plan for the Building Materials Industry predicts that the demand for the main products of the building materials industry will show a continuous growth in market size and a gradual development trend. During the Eleventh Five-Year Plan Period, the average annual growth rate of demand for major building materials products in China is 10.5% to 15.7%, while the average annual growth rate for the 12th-year product demand is expected to fall to 2.6% to 4.0%.

The market is a barometer for the industry. The rising cost and the cooling of the building decoration market are the main reasons for the continuous cooling of the construction hardware industry.

Mr. Cui, who runs the hardware and building materials business, stated that at present, the reason for the price increase of goods is the general increase in the purchase price. He reluctantly said that due to rising prices of raw materials such as steel and aluminum, the price of construction hardware has risen by more than 10%, and profits have dropped from 60% a few years ago to 20% now.