Japan Investment December 2016

Japan

Japan: Machinery orders rebound to six-month high in December

February 9, 2017

Core machinery orders (a leading indicator of capital spending over a three- to six-month period) rebounded in December and expanded at the fastest pace since June 2016. The Cabinet assessed in February that while orders had been picking up, they have now come to a standstill. Headline machinery orders (private sector, excluding volatile orders) rose 6.7% in December from the previous month in seasonally adjusted terms, which contrasted the 5.1% decrease recorded in November.

Overall non-manufacturing orders rebounded strongly in December, while growth in overall manufacturing books eased. Export orders contracted sharply in December, after having expanded at the fastest pace in over two years in November.

Compared to the same month of the previous year, core machinery orders increased 6.7% in December, which followed the 10.4% rise in November. The annual average variation in core machinery orders rose from 0.8% in November to 1.7% in December.

FocusEconomics Consensus Forecast panelists expect private non-residential investment to rise 1.3% in 2017, which is up 0.3 percentage points over last month’s projection. In 2018, the panel sees private non-residential investment expanding 1.7%.


Author: Ricard Torné, Head of Economic Research

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