Japan: Machinery orders contract in April
June 12, 2017
Core machinery orders (a leading indicator of capital spending over a three- to six-month period) declined for the first time in three months in April, casting doubts on the robustness of firms’ capital spending. Nevertheless, the Cabinet maintained its basic assessment on machinery orders, stating that while orders had been picking up, they have now come to a standstill. Headline machinery orders (private sector, excluding volatile orders) fell 3.1% in April from the previous month in seasonally adjusted terms, which contrasted the 1.4% increase in March. The print undershot the 1.3% drop that market analysts had expected.
Growth in overall manufacturing orders accelerated in April, while non-manufacturing books contracted sharply. Export orders rebounded strongly in April, following two consecutive declines.
Compared to the same month of the previous year, core machinery orders rose 2.7% in April, which contrasted the 0.7% decrease in March. The annual average variation in core machinery orders rose from 0.5% in March to 1.4% in April.