Japan: Machinery orders surge in January
March 9, 2011
Machinery orders, a three to six month leading indicator for capital spending, rose sharply in January due to an improving global outlook and rising company profits. In January, core machinery orders (private-sector, excluding volatile orders) surged a seasonally adjusted 4.2% over the previous month, beating market expectations of a 2.5% increase and overshooting the previous month's reading of 1.7%. The monthly increase was mostly driven by a noteworthy rise in manufacturing (+7.2% mom), in particular non-automobile transport equipment and chemical products. On the downside, non-manufacturing orders declined by 2.7% from the previous month. Overall machinery orders, which include private sector, government and export orders, jumped 19.4% mom, driven by a 71.4% mom surge in overseas orders.