Japan: Machinery orders contract again in May
July 10, 2017
Core machinery orders (a leading indicator of capital spending over a three- to six-month period) declined for the second consecutive month in May, casting doubts about the strength of firms’ capital spending. As a result, the Cabinet downgraded its basic assessment on machinery orders, stating that orders had come to a standstill. Headline machinery orders (private sector, excluding volatile orders) fell 3.6% in May from the previous month in seasonally adjusted terms, which followed the 3.1% decrease in April. The print contrasted the 1.7% increase that market analysts had expected.
Growth in overall manufacturing orders decelerated in May, while non-manufacturing books contracted sharply. Export orders declined in May, following April’s surge.
Compared to the same month of the previous year, core machinery orders rose 0.6% in May, which followed the 2.7% increase in April. The annual average variation in core machinery orders rose from 1.4% in April to 2.3% in May.