Japan Investment October 2017

Japan

Japan: Machinery orders rebound in October

December 13, 2017

Core machinery orders (a leading indicator of capital spending over a three- to six-month period) rebounded strongly in October, suggesting that firms have increased capital expenditure due to healthy global economic growth. Headline machinery orders (private sector, excluding volatile orders) rose 5.0% in October from the previous month in seasonally-adjusted terms, which contrasted September’s 8.1% decline. The print overshot the 3.0% expansion that market analysts had expected.

Both overall manufacturing orders and non-manufacturing books rebounded markedly in October. Export orders also fared better in October from the previous, signaling that global demand is still resilient.

Compared to the same month of the previous year, core machinery orders rose 2.3% in October, which contrasted September’s 3.5% drop. The annual average variation in core machinery orders swung from minus 0.3% in September to plus 0.2% in October.

FocusEconomics Consensus Forecast panelists expect private non-residential investment to rise 2.4% in 2018, which is up 0.2 percentage points over last month’s projection. In 2019, the panel sees private non-residential investment expanding 1.9%. In addition, FocusEconomics Consensus Forecast panelists expect gross fixed investment to increase 1.9% in 2018, which is up 0.2 percentage points over last month’s projection. In 2019, the panel sees gross fixed investment growth at 1.4%.


Author: Ricard Torné, Lead Economist

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Japan Investment October 2017

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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