Japan: Growth in machinery orders soars at the outset of the year
March 14, 2016
Core machinery orders (a leading indicator of capital spending over a three- to six-month period) expanded for the second consecutive month, with January marking the strongest expansion since 2003. This situation suggests that capital expenditure remains resilient despite a challenging economic environment. Headline machinery orders (private sector, excluding volatile orders) rose 15.0% in January over the previous month in seasonally-adjusted terms, which followed the 1.0% increase recorded in December. Moreover, the increase was above the 1.7% expansion that market analysts had expected.
Overall manufacturing orders expanded a whopping 41.2% in January, while growth in non-manufacturing books eased slightly. Against a backdrop of softening global demand, export orders declined at the fastest pace in 18 months.
Compared to the same month of the previous year, core machinery orders rose 8.4% in January, which contrasted the 3.6% increase tallied in the previous month. As a result of January’s surge, the trend now points upward, with annual average growth in core machinery orders rising from December’s 4.1% to 4.5%.