Japan: Machinery orders plummet in November
January 14, 2016
Core machinery orders (a leading indicator of capital spending over a three- to six-month period) dropped at the fastest pace in 18 months in November, adding to concerns about robustness of all-important capital expenditure. Headline machinery orders (private sector, excluding volatile orders) fell 14.4% in November over the previous month, in seasonally-adjusted terms, which contrasted the 10.7% increase recorded in October. The result exceeded the 7.9% decrease that market analysts had expected.
While both overall manufacturing orders and non-manufacturing books contracted at double-digit rates in November, the latter experienced the largest decline since 2004. In addition, export orders contracted a sharp 25.0%.
Compared to the same month of the previous year, core machinery orders expanded 1.2% in November, which followed the 10.3% increase tallied in the previous month. Despite November’s deterioration, the trend continues to point upward, with annual average growth in core machinery orders rising from October’s 4.1% to 5.4%.