Japan Investment September 2018


Japan: Machinery orders plummet to an all-time low in September

November 8, 2018

In September, core machinery orders, a leading indicator for capital spending over a three- to six-month period, logged the sharpest contraction since records began in 1987. The dismal performance reflected a strong earthquake and a typhoon in September, which disrupted economic activity, as well as a base effect from healthy expansions in the previous two months. Headline machinery orders (private sector, excluding volatile orders) fell 18.3% in September from the previous month in seasonally-adjusted terms, contrasting the 6.8% increase in August. The print was well below the 9.0% decrease expected by market analysts.

Both manufacturing and non-manufacturing orders recorded a sharp decline in September as did export orders.

Compared to the same month of the previous year, core machinery orders contracted 7.0% in September, contrasting August’s 12.6% rise. The annual average variation in core machinery orders fell from 3.5% in August to 3.2% in September.

Japan Fixed Investment Forecast

FocusEconomics Consensus Forecast panelists expect private non-residential investment to rise 2.5% 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 2.0% in 2019, which is up 0.2 percentage points over last month’s projection. In 2020, the panel sees gross fixed investment growth at 0.8%.


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Japan Investment Chart

Japan Investment September 2018

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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