Japan Investment December 2017


Japan: Machinery orders contract at fastest pace in over three years in December

February 15, 2018

Core machinery orders—a leading indicator of capital spending over a three to six month period—tumbled in December at the fastest pace since May 2014. Headline machinery orders (private sector, excluding volatile orders) fell 11.9% in December from the previous month in seasonally-adjusted terms, coming in below market expectations of a 2.3% decline. The December reading contrasts a 5.7% growth print in November.

Overall, manufacturing orders declined sharply in December, while the drop in non-manufacturing books was more moderate. Export orders contracted for the first time in three months, signaling that global demand could be weakening.

Compared to the same month of the previous year, core machinery orders fell 5.0% in December, a deterioration from the 4.1% growth recorded in November. The annual average variation in core machinery orders declined from minus 0.1% in November to minus 1.1% in December.

FocusEconomics Consensus Forecast panelists expect private non-residential investment to rise 2.8% in 2018, which is up 0.4 percentage points from last month’s projection. In 2019, the panel sees private non-residential investment expanding 2.2%. In addition, FocusEconomics Consensus Forecast panelists expect gross fixed investment to increase 1.8% in 2018, which is down 0.1 percentage points from last month’s estimate. In 2019, the panel sees gross fixed investment growth at 1.4%.


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Japan Investment December 2017

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.

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