Japan Investment March 2016


Japan: Machinery orders rebound in March

May 19, 2016

Core machinery orders (a leading indicator of capital spending over a three- to six-month period) rebounded in March, suggesting higher businesses spending in the coming months. Headline machinery orders (private sector, excluding volatile orders) rose 5.5% in March over the previous month in seasonally-adjusted terms, which contrasted the 9.2% decrease recorded in February. Moreover, the expansion was above the 0.5% increase that market analysts had expected.

Overall manufacturing orders rebounded in March, while non-manufacturing books contracted. Export orders expanded at the fastest pace in five months in March.

Compared to the same month of the previous year, core machinery orders rose 3.2% in March, which contrasted the 0.7% decrease tallied in the previous month. As a result of March’s increase, the trend now points upward, with annual average growth in core machinery orders inching up from February’s 4.0% to 4.1%.

FocusEconomics Consensus Forecast panelists expect private non-residential investment to rise 2.4% in 2016, which is unchanged over last month’s projection. In 2017, the panel sees private non-residential investment expanding 1.7%. In addition, FocusEconomics Consensus Forecast panelists expect gross fixed investment to increase 1.3% in 2016, which is down 0.1 percentage points over last month’s projection. In 2017, the panel sees gross fixed investment growth at 1.1%.

Author: Ricard Torné, Lead Economist

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Japan Investment March 2016

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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