In the first half of 2026, the total profit of industrial enterprises above designated size nationwide approached 4 trillion yuan, with the manufacturing sector achieving a year-on-year growth of 20.1%. However, looking at sub-sectors, the market did not experience a broad-based rally but instead exhibited extreme structural characteristics. According to data from gongkong®, the overall automation market grew by 4.2% in H1 2026.
At the macro level, key indicators supporting the recovery of the automation market are improving synchronously. The PPI entered an upward range in March this year, expanding to 4.1% in June, ending a 41-month downward cycle since 2022; the PMI has consistently operated above the 50 boom-bust threshold, indicating that manufacturing orders and production are fully ramping up.
The resonance of these two factors provides a solid macroeconomic foundation for the automation market. Although corporate investment willingness has recovered, the focus is more concentrated on improving O&M efficiency of existing production lines, green and low-carbon transformation, intelligent upgrades, and reducing headcount to boost efficiency. The traditional broad-based capacity expansion is unlikely to reappear.
Profit Recovery Diverges, Exports Become Core Support
In the first half of 2026, the profits of industrial enterprises showed a structural recovery trend, which can be primarily categorized into three types of performance:
1. Gradual Recovery in Traditional Industries
Profits in the industrial chains of chemicals and equipment manufacturing have steadily rebounded. Oil and coal processing have turned losses into profits, driven by the marginal improvement in domestic demand and the continuous pull of export orders.
2. Short-term Pressure in Some Industries
Profits in the automotive industry declined by about 20% year-on-year, while profits in industries such as steel and non-metallic minerals continued to drop. Intense industry competition and high costs are the main sources of pressure; however, automobile and battery prices stabilized month-on-month in June, with battery prices rising by 2% month-on-month, reflecting the initial effectiveness of efforts to curb hyper-competition.
3. Profit Explosion in New Quality Productive Capacities
AI-related industrial chains, export-oriented industries, and basic energy industries have become the core of profit growth, driving the profit increase in related industries in the first half of the year.
Exports have become the most striking growth pole in the first half of the year, with the year-on-year growth rate significantly higher than the single-digit level for the whole of last year. Exports to the US, the EU, Southeast Asia, and countries along the "Belt and Road" have maintained a strong growth momentum.
Among them, the trend of capacity repatriation is obvious. Represented by the textile industry, affected by geopolitical conflicts and low efficiency of overseas supply chains, the capacity previously transferred to Southeast and South Asia has seen a repatriation, driving domestic equipment procurement and project demand in related industries. The export structure is upgrading, with China's equipment exports transforming from the mid-to-low end to the mid-to-high end. Products such as electronic manufacturing equipment, wind power equipment, and general and special equipment are continuously improving their global market competitiveness.
In terms of capacity utilization rate, industries such as equipment manufacturing and chemicals, driven by domestic and foreign demand, have seen a continuous increase in their capacity utilization rate, with some fields even experiencing phased shortages. Meanwhile, process-oriented industries are still in the stage of eliminating backward capacity and releasing high-quality capacity. The improvement in capacity efficiency has offset the demand for capacity scale expansion.
OEM Leads Growth, Process Industries Move Forward Under Pressure
Under the combined effects of weak macroeconomic recovery, continuous export exceeding expectations, accelerated implementation of the AI industry, and the transformation and upgrading of existing equipment, in the first half of 2026, the OEM market led the pack with a growth rate of 8.7%, higher than the overall industry growth rate. Among them, the second quarter achieved a year-on-year growth of 10.5%, continuing to accelerate compared to Q1.
Looking at the performance of sub-sectors, industry growth presents clear echelon characteristics:
High-Growth Echelon
Electronic manufacturing equipment, transportation equipment, and machine tools perform outstandingly.
Electronic manufacturing equipment benefits from the explosion of the AI industrial chain, the recovery of 3C consumption, and the demand for semiconductor and power battery production line construction, with order growth significantly leading;
The core driver for transportation equipment comes from shipbuilding. Orders in the shipbuilding industry have been booked up to 2028 or even 2030, with orders for cruise ships, LNG-fueled ships, and container ships being particularly strong;
Machine tools show structural divergence, with high-end models experiencing strong growth.
Stable-Growth Echelon
Traditional industries such as food machinery, packaging machinery, and rubber and plastic machinery have shown stable domestic demand. Coupled with export pull and the upgrading of existing production lines, they maintain overall stable growth.
Food machinery benefits from segmented demands such as pre-prepared dishes, pet food, and cold chain logistics;
Textile machinery has seen a trend of capacity repatriation from Xinjiang to central regions, with segmented models such as knitting and dyeing and finishing performing outstandingly;
The logistics industry benefits from the construction of overseas warehouses for cross-border e-commerce. Segmented fields such as pet logistics have also seen the emergence of hundred-million-yuan-level large orders.
Going global remains the core driving force for OEM growth in the first half of the year. Export projects have gradually extended from single equipment sales to comprehensive projects such as overseas factory construction, power and energy supporting facilities, and transportation infrastructure. Notably, competition in overseas markets has shifted from price competition to system competition. Certification qualifications, localized services, and channel network construction are becoming new competitive barriers for automation manufacturers. A mere product price advantage is difficult to support long-term overseas growth.
Product Level
Products closely related to OEM, such as PLCs, inverters, servos, sensors, and IPCs, have shown good growth. Affected by the rise in upstream raw material prices, from the end of 2025 to the first half of 2026, mainstream automation products experienced a round of general price increases, with IPCs, PLCs, inverters, servos, and other products seeing price hikes of varying degrees.
Among them, IPCs have the highest correlation with chips, so their price increase is the most obvious. Against the backdrop of tight supply chains, the priority of purchasers has shifted from "price first" to "delivery time first and solution stability first". Leading manufacturers, with their supply chain management capabilities and capital advantages, are more likely to secure large orders, further increasing industry concentration.
The overall automation market in process industries remains in a weak operating state, without a comprehensive recovery. Fields such as petroleum, power, municipal, and automotive have achieved slight growth, while high energy-consuming industries such as chemicals, petrochemicals, mining, and building materials still face significant pressure.
The petroleum industry has seen slight growth, with the existing market performing better than new projects.
Driven by the contraction of international supply, the petrochemical industry has seen a stable increase in domestic demand. However, due to the long project cycle, actual procurement has not yet been released on a large scale.
The chemical field shows obvious divergence. The approval of traditional bulk raw material projects has been tightened, while high-tech materials, electronic chemicals, and low-carbon projects have obtained a policy green channel, releasing considerable increments.
The power industry has grown steadily, with thermal power focusing on transformation and nuclear power achieving double-digit growth.
Meanwhile, domestic substitution is accelerating its penetration in process industries. Local leading manufacturers, relying on digital solutions, Xinchuang adaptation, and global layout, have achieved faster-than-industry growth in the process market; foreign brands are more suitable for focusing on segmented scenarios with high-end processes and high-performance requirements.
Policy Implementation Yields Results, Emerging Tracks Blossom in Multiple Points
As the inaugural year of the "15th Five-Year Plan", the policy direction has been clearly set. The "Two Major, Two New" policy has entered the stage of substantive promotion. More importantly, the "Six Networks", consisting of the water network, new power grid, computing power network, new-generation communication network, urban underground pipe network, and logistics network, are expected to leverage a total social investment of 7 trillion yuan this year, bringing huge supporting demand to the industrial control industry. Among them, the construction of the computing power network is closely related to the AI industrial chain, driving automation products including IPCs, servos, PLCs, vision products, and sensors; the construction of the power grid and water network creates market space for products such as low-voltage electrical appliances, inverters, instruments, and DCS.
Looking at the entire "15th Five-Year Plan" cycle, industries related to new quality productive forces will become the core growth pole for automation demand. Industries such as semiconductors, marine economy, modern facility agriculture, NEV batteries, embodied intelligence, data centers, new energy storage, and hydrogen energy are expected to achieve an annual growth rate of over 10%, leveraging a total automation product market size of 350 billion to 450 billion yuan.
Among hot industries, energy storage and data centers are particularly worth attention. The energy storage market not only benefits from national policy support but also gains new growth momentum due to the huge demand for electricity from AI computing power. AI computing chips rely on a stable power supply, and the instability of new energy power generation precisely spawns supporting demand for energy storage. Currently, electrochemical energy storage remains the mainstream technical route, involving PCS systems, monitoring systems, temperature control systems, and energy management systems. Local brands dominate in fields such as controllers.
In terms of data centers, 158 projects planned with investments of over 100 million yuan were recorded nationwide in the first half of this year. Automation products required for data centers cover instruments, such as pressure, temperature, flow, level, and moisture instruments, control systems mainly based on DDC, and drive systems. Currently, foreign brands still hold a high share in the data center field, but in the next five years, this market is expected to grow at an average annual rate of over 20%, leaving huge room for domestic substitution.
Humanoid robots usher in the first year of mass production in 2026, with an output of about 40,000 units in the first half of the year, and the full-year output is expected to reach 100,000 units. Industrial control enterprises such as Inovance Technology and Veichi have already laid out in the fields of components and supporting parts. Demand for collaborative robots and SCARA robots is strong, and the output of industrial robots grew by 28% in the first half of the year, with the market continuing its booming demand.
2026 is a transitional year connecting the past and the future for China's automation market. Traditional cycles are still lingering at the bottom, but the growth momentum of new quality productive forces has taken shape. A comprehensive industry recovery has not yet arrived, but structural growth opportunities are clear and certain.
For enterprises in the automation industrial chain, focusing on the four main lines of exports, AI, existing equipment transformation, and emerging tracks, deeply cultivating solution capabilities in segmented scenarios, and building differentiated competitive barriers will be the core path to cross the cycle and achieve high-quality growth.