Japan Investment June 2019

Japan

Japan: Machinery orders rebound strongly in June

August 14, 2019

Core machinery orders, a leading indicator for capital spending over a three- to six-month period, posted the fastest expansion since January 2003 in June, suggesting that capital expenditure will remain resilient in the coming months. Headline machinery orders (private sector, excluding volatile orders) rose 13.9% over the previous month in seasonally-adjusted terms in June, contrasting the 7.8% decrease in May. The print overshot the 1.3% decrease expected by market analysts.

Overall non-manufacturing books soared in June, while manufacturing orders posted a smaller contraction. Export orders posted the third consecutive decline in the same month.

Compared to the same month of the previous year, core machinery orders expanded 12.5% in June, contrasting May’s 3.7% decrease. The annual average growth in core machinery orders rise from 0.9% in May to 2.0% in June.

FocusEconomics Consensus Forecast panelists expect private non-residential investment to rise 1.8% in 2019, which is unchanged over last month’s projection. In 2020, the panel sees private non-residential investment expanding 1.0%. In addition, FocusEconomics Consensus Forecast panelists expect gross fixed investment to increase 1.5% in 2019, which is unchanged over last month’s projection. In 2020, the panel sees gross fixed investment growth at 0.9%.


Author:, Economist

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Japan Investment June 2019

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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