Japan Investment September 2017


Japan: Machinery orders plunge in September

November 9, 2017

Core machinery orders (a leading indicator of capital spending over a three- to six-month period) plunged at their fastest pace in over two years in September, suggesting that capital expenditure is losing momentum. Headline machinery orders (private sector, excluding volatile orders) fell 8.1% in September from the previous month in seasonally-adjusted terms, which contrasted August’s 3.4% rise. The print undershot the 1.8% decline that market analysts had expected.

Both overall manufacturing orders and non-manufacturing books contracted markedly in September. Export orders also plunged, signaling that global demand is gradually easing.

Compared to the same month of the previous year, core machinery orders contracted 3.5% in September, which contrasted August’s 3.4% rise. The annual average variation in core machinery orders swung from plus 0.5% in august to minus 0.3% in September.

FocusEconomics Consensus Forecast panelists expect private non-residential investment to rise 2.2% in 2018, which is down 0.2 percentage points over last month’s projection. In 2019, the panel sees private non-residential investment expanding 1.8%. In addition, FocusEconomics Consensus Forecast panelists expect gross fixed investment to increase 1.7% in 2018, which is unchanged over last month’s projection. In 2019, the panel sees gross fixed investment growth at 1.2%.

Author:, Economist

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