Japan Investment March 2019

Japan

Japan: Machinery orders expand at fastest pace in five months in March

May 22, 2019

Core machinery orders, a leading indicator for capital spending over a three- to six-month period, posted the strongest increase in five months in March, offering hopes that capital expending could revive in the months ahead. Headline machinery orders (private sector, excluding volatile orders) expanded 3.8% over the previous month in seasonally-adjusted terms in March, following the 1.8% rise in February. The print contrasted the 0.7% decrease expected by market analysts.

Overall non-manufacturing orders expanded strongly in March, while manufacturing books contracted. Moreover, export orders expanded for the second consecutive month in March.

Compared to the same month of the previous year, core machinery orders fell 0.7% in March, following February’s 5.5% decrease. The annual average growth in core machinery orders rose from 2.6% in February to 2.8% in March.

FocusEconomics Consensus Forecast panelists expect private non-residential investment to rise 2.1% in 2019, which is up 0.1 percentage points over last month’s projection. In 2020, the panel sees private non-residential investment expanding 1.3%. In addition, FocusEconomics Consensus Forecast panelists expect gross fixed investment to increase 1.6% in 2019, which is up 0.1 percentage points over last month’s projection. In 2020, the panel sees gross fixed investment growth at 0.9%.


Author: Ricard Torné, Lead Economist

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Japan Investment March 2019

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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