Japan: Machinery orders increase again in April
May 17, 2017
Although core machinery orders (a leading indicator of capital spending over a three- to six-month period) expanded for the second consecutive month in March, they weakened in Q1 compared to Q4 2016, suggesting that businesses investment likely weakened in the three months up to March. 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) rose 1.4% in March from the previous month in seasonally adjusted terms, which followed the 1.5% increase in February. The print undershot the 2.1% rise that market analysts had expected.
Growth in overall manufacturing orders softened in March, while non-manufacturing books dipped into the red. Export orders declined further in March, suggesting that the pickup in global demand could be coming to an end.
Compared to the same month of the previous year, core machinery orders decreased 0.7% in March, which contrasted the 5.6% increase in February. The annual average variation in core machinery orders rose declined a 1.0% increase in February to a 0.5% rise in March.