Japan: Machinery orders plummet in May amid mounting global trade tensions
Core machinery orders, a leading indicator for capital spending over a three- to six-month period, posted the largest contraction in eight months in May, suggesting that trade tensions between China and the United States are weighing on global demand and impacting on capital expenditure. Headline machinery orders (private sector, excluding volatile orders) fell 7.8% over the previous month in seasonally-adjusted terms in May, contrasting the 5.2% rise in April. The print undershot the 4.7% decrease expected by market analysts.
Both overall manufacturing books and non-manufacturing orders contracted in May, while export orders posted the second consecutive decline in the same month.
Compared to the same month of the previous year, core machinery orders fell 3.7% in May, contrasting Aprils’ 2.5% increase. The annual average growth in core machinery orders dropped from 2.3% in April to 1.3% in May.