Japan: Machinery orders decelerate in July
September 12, 2016
Core machinery orders (a leading indicator of capital spending over a three- to six-month period) expanded for the second consecutive month in July, signaling a gradual recovery of the Japanese economy. Headline machinery orders (private sector, excluding volatile orders) rose 4.9% in July over the previous month in seasonally-adjusted terms, which followed the 8.3% increase recorded in June. The result surprised market analysts who had expected a 3.1% decrease.
While overall manufacturing orders decelerated markedly in July, non-manufacturing books accelerated in the same month. Export orders swung to a contraction in July after expanding in June.
Compared to the same month of the previous year, core machinery orders expanded 5.2% in July, which contrasted the 0.9% decline observed in June and was the fastest growth rate since January. As a result of July’s expansion, the trend is now pointing upward. The annual average variation in core machinery orders rose from June’s minus 0.5% to minus 0.3%.