June Sino-Japanese Excavator Exports: Broad Strength in Emerging Markets, Divergence in US/Europe

Overview

This report is Goldman Sachs' monthly tracking update on Sino-Japanese machinery exports for June 2026. The core conclusion is that global construction machinery demand shows clear regional divergence: emerging markets (EMs) maintain broad and strong growth, while developed markets (DMs) show uneven trends. Through high-frequency customs export data, the report provides investors with a more timely demand verification tool than corporate quarterly reports, and details the volume and price performance of Chinese and Japanese exports in different regions and their mapping relationships to global leading enterprises.

Core views

Global Totals and Regional Divergence Pattern: In June 2026, China's excavator export value increased by 34% year-on-year (+29% in Q2), Japan's export value (in JPY) increased by 7% year-on-year (+15% in Q2), and combined Sino-Japanese export value (in USD) increased by 17% year-on-year. This growth was primarily driven by emerging markets, where South America and Africa remained strong (export values grew by 46% and 43% respectively), Southeast Asia accelerated, and the Middle East turned from negative to positive year-on-year. In contrast, developed markets showed weak and divergent performance: although North American export values maintained steady growth of about 15%, export volumes declined by 14% year-on-year; Europe saw volume increases but price declines, with export values turning negative by -3% year-on-year, mainly dragged down by slowing Japanese exports to Europe. Upgrading of China's Export Structure and Regional Substitution Effect: Chinese exports show significant 'volume-price divergence', especially in the North American market, where export volumes declined by 34% year-on-year in June, but export values surged by 46%. This suggests that China's exports to the US are shifting towards higher-value models or experiencing unit price increases. In emerging markets, Chinese companies continue to dominate, with export values to South America growing by approx. 50% and to Southeast Asia by 35%. Even in Europe, Chinese export values maintained 16% growth, showing that the ability to substitute traditional Japanese, European, and American brands is still strengthening globally. Japanese Exports as a Barometer for Developed Market Demand: Japanese excavator exports are highly concentrated in developed markets such as North America and Europe, so their data fluctuations better represent the real demand in these mature markets. In June, Japanese exports to North America accelerated to 23% growth, confirming the resilience of North American infrastructure or equipment renewal demand; however, exports to Europe declined by 11% year-on-year, and exports to Asia (excluding China and Japan) declined by 24%, reflecting weak demand in non-US developed markets and some Asian regions. Combined with historical data, Japanese export data has a higher correlation with the revenues of companies like Caterpillar and Volvo in European and American markets, serving as a key leading indicator for predicting these companies' developed market performance. Validation of the Effectiveness of Export Data as a High-Frequency Forecasting Tool: The report emphasizes that excavators account for approx. 50% of global construction machinery demand, and China and Japan supply approx. 70%-80% of excavators globally (excluding China and Japan). Backtesting results show that combined Sino-Japanese export data is highly correlated with the quarterly revenues of major global construction machinery listed companies, with the highest correlation to Caterpillar (CAT) (0.86-0.91). Additionally, this data series correlates with Komatsu's actual market demand trends (usually lagging by 3 months) at 0.64-0.79. This means investors can use this monthly high-frequency data to effectively capture inflection points in industry prosperity before corporate earnings releases.

Analysis framework

The institution adopts an analytical framework of 'mapping high-frequency trade data to corporate fundamentals'. First, excavators are selected as an industry proxy variable because they account for half of global construction machinery demand and have the most active cross-border trade. Second, a composite indicator is constructed using monthly export data from Chinese and Japanese customs, smoothed by weighted merging to eliminate noise caused by single-country supply-side disturbances (such as capacity transfer). Next, export data is split by destination to distinguish between developed and emerging markets to identify structural opportunities. Finally, long-term backtesting quantifies and verifies the correlation coefficients between export data and companies' regional revenues, establishing confidence in its role as a leading indicator. This method allows macroeconomic trade data to directly serve micro-level corporate performance prediction.

Methodology notes

• Industry/Industrial Analysis FrameworkPenetration S-curve

  Using excavator exports as a proxy for global construction machinery demand

  Excavators account for approx. 50% of global construction machinery demand and are the most actively traded category across regions. By analyzing the trade flows of this core single product, one can efficiently and accurately infer the prosperity of the entire industry, avoiding the complexity of tracking full-category data.

• Quantitative/Factor/Portfolio TheoryMulti-factor model

  Combining Sino-Japanese export data to eliminate supply-side noise

  Looking at Chinese or Japanese exports alone may be subject to interference from supply factors such as capacity transfer and exchange rates. Analyzing them together can offset structural changes in the supply side of a single country, thereby more purely reflecting real fluctuations in global terminal demand.

• Macroeconomic framework

  High-frequency trade data as a leading indicator for corporate revenue

  Corporate quarterly reports usually lag by several months, while customs export data is released monthly. The report confirms through backtesting that there is a significant positive correlation between export data and company revenue (e.g., CAT correlation reaches 0.91), allowing investors to predict earnings inflection points 1-2 months in advance and gain an information time advantage.

Asset mapping & comparison

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

• Caterpillar (CAT)

  Benefit/Harm Logic: As a global leader, its revenue has the highest correlation with Sino-Japanese export data (0.86-0.91). Steady growth in North American export values benefits its base business, but weakness in Europe and parts of Asia may constitute a drag.

  Strengths

  Strong resilience in North American market demand, high pricing power, and highly synchronized verification of demand with Chinese export data.

  Weaknesses

  Weakening demand in Europe and parts of Asia may affect the growth rate of its non-US business.

  Comparison

  Compared to pure emerging-market-oriented Chinese brands, CAT has a larger exposure to developed markets and is more deeply affected by European and American cycles.

  Risks

  If North American export volume declines widen to the value end, or if European recovery falls short of expectations, it will directly impact its quarterly revenue.

• Komatsu (6301.T)

  Benefit/Harm Logic: Japanese exports are a direct reflection of its demand. Accelerated growth in Japanese exports to North America in June benefits its North American business, but declining exports to Europe and Asia signal pressure on its non-US business.

  Strengths

  Deep roots in the North American market, benefiting from local equipment renewal cycles.

  Weaknesses

  Weak exports to Europe and Asia (excluding China and Japan), and its own export data already shows cooling demand in these regions.

  Comparison

  Compared to CAT, Komatsu relies more heavily on Japanese domestic exports and is more affected by JPY exchange rates and Japanese supply chain factors.

  Risks

  Although emerging markets are strong, Komatsu's market share is relatively low, making it difficult to fully offset downside risks in developed markets (excluding North America).

• Volvo CE / CNH Industrial

  Benefit/Harm Logic: Revenues of both companies are highly correlated with Japanese >6-ton excavator exports. The negative turn in European export values constitutes a direct negative signal for them.

  Strengths

  Brand and channel barriers in the European market.

  Weaknesses

  Europe is currently the weakest developed market, and Chinese brand export values in Europe still maintain double-digit growth, intensifying competition.

  Comparison

  Compared to CAT and Komatsu, these two companies are more sensitive to the European market and have relatively weaker ability to resist regional risks.

  Risks

  If European construction activity remains sluggish, coupled with penetration by Chinese competitors, it may lead to a double decline in market share and profit margins.

Key data

• YoY Growth Rate of China Excavator Export Value+34%June 2026 data, Q2 was +29%
• YoY Growth Rate of Japan Excavator Export Value+7%June 2026 data (in JPY), Q2 was +15%
• YoY Growth Rate of Combined Sino-Japanese Export Value+17%June 2026 data (in USD), Q2 was +19%
• YoY Change in North American Market Export Volume-14%June 2026 data, Q2 was previously +11%
• YoY Change in European Market Export Value-3%June 2026 data, Q2 was +7%
• Correlation Coefficient of Data with CAT Revenue0.86-0.91Historical correlation between Sino-Japanese export data and Caterpillar quarterly revenue

Impact & implications

For the construction machinery sector, this means that global demand is not synchronously receding but entering a stage of structural divergence. Chinese companies with deep layouts in emerging markets and obvious cost-performance advantages (such as Sany, XCMG, etc.) are expected to continue enjoying the dividends of going overseas; while traditional giants relying on European and American markets (such as Komatsu, Volvo) may face short-term performance pressure, unless North American demand can continuously offset weakness in Europe. At the same time, this high-frequency tracking tool prompts investors not to linearly extrapolate global industry prospects based solely on pessimistic sentiment in a single region, but to closely monitor monthly export data to verify the actual demand resilience in each region.

Risks

• Geopolitical and Trade Barrier Risks: If the US and Europe impose tariffs on Chinese machinery or implement non-tariff barriers, it may distort Chinese export data or hinder actual deliveries.
• Exchange Rate Volatility Interference: Significant fluctuations in the JPY/USD exchange rate may distort the combined export growth rate calculated in USD, masking real changes in demand volume.
• Structural Changes in Data: Capacity transfer between China and Japan (e.g., reduction in production by Japanese factories in China) may cause export data to decouple from actual terminal demand.

What to watch

• Subsequent monthly Sino-Japanese excavator export volume and price data, especially whether North American export volumes stop falling and rebound.
• Quarterly financial reports from major construction machinery companies to be released soon, to verify the predictive accuracy of high-frequency export data.
• Implementation of infrastructure investment policies in Europe and the Middle East, observing signals of demand inflection points.