China and Japan machinery export tracker: DM accelerates, EM resilience continues

Overview

This report updates Goldman Sachs' China and Japan machinery export tracker, focusing on regional changes in excavator export volume and export value in Jan-Feb 2026. The core conclusion is that developed markets accelerated, especially Europe and North America; emerging markets remained resilient overall, with South America and Africa sustaining high growth and Southeast Asia turning from weakness in Q4 2025 to acceleration.

Core views

Combined excavator export value from China and Japan grew 37% yoy in Jan-Feb 2026, accelerating further from +29% yoy in Q4 2025. China's export value rose 32% yoy, below +41% yoy in Q4 2025 but still strong; Japan's export value rose 48% yoy, a sharp acceleration from +14% yoy in Q4 2025. By region, North America export value rose 41% yoy, Europe export volume/value rose 66%/36% yoy, South America continued to grow 60%+, the Middle East and Africa export volume/value rose 49%/40% yoy, and Southeast Asia export volume/value rose 38%/22% yoy.

Analysis framework

The report breaks down excavator export volume and export value from China and Japan by destination region, and compares them with the previous quarter, historical regional demand, and quarterly sales of global construction machinery companies to assess global machinery demand momentum. Japan exports are viewed as an important proxy for demand in North America and Western Europe, while China exports are viewed as an important proxy for EM demand in Southeast Asia, the Middle East, Africa, and South America; combining the two countries' data reduces noise from supply-chain switching between the two countries.

Methodology notes

• High-frequency demand proxyChina and Japan excavator export tracker

  Use export volume and export value to track global construction machinery sales momentum

  The report believes excavators account for about 50% of global construction machinery demand, and China and Japan are the main global supply sources, so excavator exports from the two countries can serve as a high-frequency indicator of global construction machinery demand.

• Correlation backtestQuarterly sales and export series correlation analysis

  Test how well export data explains construction machinery company sales

  The report says quarterly sales revenue of machinery companies across the global coverage universe show high correlation with export data series, with CAT having the highest correlation at about 0.86-0.91.

• Regional demand validationKomatsu historical market demand comparison

  Validate export signals using regional demand data released with a three-month lag

  The correlation between the export data series and historical market demand trends in major regions tracked by Komatsu is 0.64-0.79, supporting its use as a high-frequency proxy for regional demand.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Global construction machinery equities

  Export tracker as a high-frequency indicator of sales and demand

  Strengths

  Combined China-Japan export value and volume both maintained high double-digit growth, indicating strong industry demand momentum.

  Weaknesses

  Export data cannot fully replace end-market sales, and different regions may be affected by supply-source switching, inventory, and pricing factors.

  Comparison

  The report says the export series has high correlation with quarterly sales of global machinery companies, with CAT showing the highest correlation at about 0.86-0.91.

  Risks

  If export growth is driven mainly by restocking or supply-chain switching rather than end demand, the signal for corporate revenue will weaken.

• Construction machinery demand in North America and Europe

  Primary source of DM acceleration

  Strengths

  North America export value rose 41% yoy, Europe export volume/value rose 66%/36% yoy, and Japan's export contribution was significant.

  Weaknesses

  Europe is still differentiated internally, with Western Europe and other Europe stronger, while Central and Eastern Europe partly drags on value growth.

  Comparison

  North America export value growth improved from +5% in Q4 2025 to +41% in Jan-Feb 2026, the most notable improvement.

  Risks

  Mature-market interest rates, infrastructure cycles, and dealer inventory changes may affect sustainability.

• EM construction machinery demand

  South America, Africa, and Southeast Asia support EM resilience

  Strengths

  South America and Africa maintained 60%+ growth, while Southeast Asia export volume/value improved from +16%/-1% in Q4 2025 to +38%/+22%.

  Weaknesses

  There is still pressure within Southeast Asia, for example United Tractor's shipments in Indonesia were down 11% yoy in 2M26.

  Comparison

  China exports are more representative in EM regions such as South America, Southeast Asia, the Middle East, and Africa, while Japan's performance is mixed across some EM regions.

  Risks

  Commodity cycles, exchange rates, financing conditions, and regional policy changes may cause EM demand to fluctuate.

Key data

• China export value growth+32% yoyJan-Feb 2026; Q4 2025 was +41%.
• Japan export value growth+48% yoyJan-Feb 2026; Q4 2025 was +14%, a significant acceleration.
• Combined China-Japan export value growth+37% yoyJan-Feb 2026; acceleration from +29% in Q4 2025.
• Combined China-Japan export volume growth+49% yoyJan-Feb 2026; China +52%, Japan +42%.
• North America export performanceVolume/value about +40% yoy; value +41% yoyImproved from +38% in volume and +5% in value in Q4 2025, mainly driven by the rebound in Japan exports.
• Europe export performanceVolume/value +66%/+36% yoyJapan export volume/value +65%/+86%, while China export volume was strong but value growth was slower.
• South America export performance60%+ yoyMainly driven by about +70% growth in China exports, while Japan export volume/value also increased by +10%/+27%.
• Middle East and Africa export performanceVolume/value +49%/+40% yoyAfrica maintained 60%+ growth, while the Middle East saw volume/value growth of +33%/+11%.
• Southeast Asia export performanceVolume/value +38%/+22% yoyImproved significantly from +16%/-1% in Q4 2025, mainly driven by China's +47%/+38% growth; Japan exports fell -26%/-51%.
• Share of excavators in construction machinery demandAbout 50%Used by the report to explain the representativeness of excavator exports as a proxy for global construction machinery demand.

Impact & implications

Export data point to global construction machinery demand remaining in an expansion phase in early 2026, with the growth structure broadening from EM resilience alone to DM acceleration. For the global construction machinery value chain, improving North America and Europe is favorable for companies with exposure to Japan exports and mature markets; strength in South America, Africa, and Southeast Asia continues to support the China export chain and manufacturers with strong EM market presence.

Risks

• Export data is a high-frequency proxy and may be affected by inventory, pricing, exchange rates, and shifts in supply sources.
• Combining China and Japan exports reduces noise from a single source, but it still cannot fully represent end demand in all regions.
• Europe's value growth is dragged by weakness in Central and Eastern Europe, showing that the regional structure is not balanced.
• Although Southeast Asia accelerated overall, Japan exports fell and Indonesia shipments declined, indicating continued pressure in some local markets.
• The report does not provide a single-stock rating or target price, so it cannot be directly equated with an individual stock investment recommendation.

What to watch

• Whether combined China-Japan export volume and export value will maintain high double-digit growth in subsequent months.
• Whether the rebound in North America export value can expand from Japan-driven recovery to a broader improvement in demand.
• Whether the divergence among Western Europe, other Europe, and Central and Eastern Europe narrows.
• Whether the strength of EM demand in South America, Africa, and Southeast Asia continues.
• Whether the synchronization between global machinery companies' quarterly sales and the export tracker continues to hold.
• Whether Komatsu's regional demand data, once released, confirms the current export signal.