Japan: Weak machinery orders in June
August 10, 2017
Core machinery orders (a leading indicator of capital spending over a three- to six-month period) declined for the third consecutive month in June, casting doubts about the strength of firms’ capital spending in the months to come. Headline machinery orders (private sector, excluding volatile orders) fell 1.9% in June from the previous month in seasonally-adjusted terms, which followed the 3.6% decrease in May. The June print, although more moderated than May’s decline, substantially contrasted the 3.6% increase that the market had expected.
Overall manufacturing orders declined in June, contrasting May’s rise, while non-manufacturing books rebounded. Export orders declined in June over the same period, albeit at a slower pace than in May.
Compared to the same month of the previous year, core machinery orders fell 5.2% in June, which contrasted May’s 0.6% increase. The annual average variation in core machinery orders fell from 2.3% in May to 1.9% in June.
Author: Edward Gardner, Economist