Japan Investment


Machinery orders in June contract at fastest pace in over one year

Core machinery orders (a leading indicator of capital spending over a three- to six-month period) declined sharply in June, after expanding for three consecutive periods. Headline machinery orders (private sector, excluding volatile orders) declined 7.9% in June over the previous month, in seasonally-adjusted terms, which contrasted the 0.6% increase recorded in May. The result exceeded the 4.8% decrease that market analysts had expected and represented the steepest drop since May 2014.

While overall manufacturing orders declined sharply in June, non-manufacturing books recorded a mild increase in the same month. On the upside, export orders expanded strongly in June, reflecting rising overseas demand for Japanese goods.

Compared to the same month of last year, core machinery orders rose 16.6% in June. The print marked a moderation over the 19.3% increase tallied in the previous month. As a result, the trend continues to point upward, with annual average growth in core machinery orders rising from 2.2% in May to 3.8% in June, which marked a six-month high.

The Cabinet Office maintained its assessment on machinery orders, stating that, “they are picking up.” Businesses surveyed by the Cabinet Office predict that there will be a 2.9% increase in the third quarter, following Q2’s 6.3% expansion.

FocusEconomics Consensus Forecast panelists expect private non-residential investment to rise 2.2% in 2015, which is up 0.1 percentage points over last month’s projection. In 2016, the panel sees private non-residential investment expanding 3.0%. In addition, FocusEconomics Consensus Forecast panelists expect gross fixed investment to drop 1.2% in 2015, which is up 0.2 percentage points over last month’s projection. In 2016, the panel sees gross fixed investment growth at 2.1%.

Sample Report

Looking for forecasts related to Investment in Japan? Download a sample report now.


Japan Investment Chart

Japan Investment June 2015 0

Note: Month-on-month changes of seasonally adjusted core machinery orders and year-on-year growth rate in %.
Source: Ministry of Economy, Trade and Industry (METI) and FocusEconomics calculations.

Japan Economic News

More news

Search form