Growth in China's machinery industry will be slower in 2005 compared to 2004, said Yu Zhen, chairman of China Machinery Industry Federation Wednesday during the annual meeting of the federation.

The growth rate of total output value is projected to be 15 to 20 percent, added value grow 15 percent and profit, 10 percent, compared with those of 2004.

According to the federation's statistics, in 2004, the sector's total output value surged to 3.27 trillion RMB yuan, up 27.41 percent year-on-year. Added value and profit grew to 863.5 billion yuan and 185.8 billion yuan, up 27.7 percent and 16.51 percent.

In 2004, profits of farming machinery, electrical machinery and machine tool companies enjoyed fast growth.

Yu said farming machinery grew fast due to the fact that the central government had given more support to rural areas.

Shortage of power supply stimulated a fast growth of the sector of electrical machinery, he said.

Engineering machinery and motor vehicles saw a decline in profit, with a decrease of 27.76 percent and 5.7 percent. Yu said decline of the former sector is because the nation's macro regulation caused construction projects to slow or stop.

Profit decline in the motor vehicle sector is due to a price increase of raw material and a drop in vehicle prices, he said.

Yu said in 2005 growth rate of these two sectors will slow compared with the high growth rate in previous two years.

Electrical equipment and chemical industry, farming machinery and food packaging machinery will grow quickly, he predicted.

Source: Xinhua