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Japan: Machinery orders rebound strongly in September

November 12, 2015

Core machinery orders (a leading indicator of capital spending over a three- to six-month period) rebounded sharply to an 18-month high, after having declined in the previous three periods. Headline machinery orders (private sector, excluding volatile orders) expanded 7.5% in September over the previous month, in seasonally-adjusted terms, which contrasted the 5.7% decrease recorded in August. The result overshot the 3.3% increase that market analysts had expected.

While overall manufacturing orders declined in September, non-manufacturing books expanded at the fastest pace since May 2013. In addition, export orders in September rebounded, after having contracted in the previous month at the steepest rate in over one year.

Compared to the same month last year, core machinery orders contracted 1.7% in September. The print followed the 3.5% drop tallied in the previous month. Despite the slight improvement seen in September, the trend now points downward, with annual average growth in core machinery orders falling from August’s 3.9% to 3.0%.

FocusEconomics Consensus Forecast panelists expect private non-residential investment to rise 1.0% in 2015, which is down 0.5 percentage points over last month’s projection. In 2016, the panel sees private non-residential investment expanding 2.1%, which is down 0.7 percentage points over last month’s estimate. In addition, FocusEconomics Consensus Forecast panelists expect gross fixed investment to increase 0.5% in 2015, which is down 0.2 percentage points over last month’s projection. In 2016, the panel sees gross fixed investment growth at 1.4%, which is down 0.3 percentage points over last month’s projection.


Author: Ricard Torné, Head of Economic Research

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Japan Investment September 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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