Japan Investment December 2015

Japan

Japan: Machinery orders rebound in December

February 17, 2016

Following disappointing GDP data for Q4, the rebound in core machinery orders (a leading indicator of capital spending over a three- to six-month period) represents positive news for the country as it signals still-resilient capital expenditure. Headline machinery orders (private sector, excluding volatile orders) rose 4.2% in December over the previous month, in seasonally-adjusted terms, which contrasted the 14.4% decrease recorded in November. That said, the increase was below the 4.7% expansion that market analysts had expected.

Overall manufacturing orders continued to contract in December, albeit at a slower pace, while non-manufacturing books rebounded. In addition, the drop in export orders eased in December.

Compared to the same month of the previous year, core machinery orders fell 3.6% in December, which contrasted the 1.2% increase tallied in the previous month. In the full year 2015, core machinery orders expanded 4.1%, which was broadly stable compared to the 4.0% increase tallied in 2014.

FocusEconomics Consensus Forecast panelists expect private non-residential investment to rise 2.0% in 2016, which is down 0.1 percentage points over last month’s projection. In 2017, the panel sees private non-residential investment expanding 2.1%. In addition, FocusEconomics Consensus Forecast panelists expect gross fixed investment to increase 1.5% in 2016, which is up 0.2 percentage points over last month’s projection. In 2017, the panel sees gross fixed investment growth at 1.3%.


Author: Ricard Torné, Lead Economist

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Japan Investment December 2015

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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