Japan's machinery orders increase for 2nd straight month in August
Source: Xinhua | 2020-10-13
Japan's core private-sector machinery orders increased marginally in August from a month earlier, marking the second straight month of growth that has been largely hampered by the global novel coronavirus pandemic, the government said in a report on Monday.
According to the Cabinet Office, the orders, excluding those for ships and from electricity utilities due to their volatility, inched up 0.2 percent to total 752.49 billion yen (7.13 billion U.S. dollars) in the recording period, reflecting the nation's increased business activity amid the pandemic.
The monthly rise came on the heels of a 6.3 percent rise in July, and a 7.6 percent decline in June, the government's data showed.
As a result of the latest uptick in orders, the Cabinet Office upgraded its assessment on orders, stating they are "bottoming out."
The upgraded view was the first time in 16 months the office had upgraded its assessment of the nation's machinery orders.
Its previous view a month earlier stated that machinery orders were "on a decreasing trend."
The office said that orders from manufacturers edged down 0.6 percent to 311.30 billion yen (2.95 billion U.S. dollars), marking the first decline in three months.
Orders from non-manufacturers, meanwhile, were down 6.9 percent to 412.28 billion yen (3.90 billion U.S. dollars), after logging a rise of 3.4 percent in July, the office's data showed.
The government said that total orders increased 19.8 percent to 2.19 trillion yen (20.76 billion U.S. dollars), in the recording period, marking the second straight monthly increase.
Public sector orders gained 28.3 percent to 267.69 billion yen (2.53 billion U.S. dollars) for the first rise in three months.
Orders from overseas, meanwhile, which act as future barometer of exports, surged 49.6 percent to 918.97 billion yen (8.71 billion U.S. dollars), marking the second consecutive monthly increase, the office said.
Machinery orders are a key advance indicator for corporate capital spending and the government uses the data to predict the strength of business spending in a six to nine month period ahead.
A rise in capital expenditure can boost the economy as Japanese companies are producing more machinery to meet rising demands from overseas markets.
Such business investment accounts for roughly 15 percent of Japan's gross domestic product.
The types of machinery included in the monthly government survey comprise engines and turbines, heavy electrical machinery, electronic and communication equipment, industrial machinery, machine tools, railway rolling stock, road vehicles, aircraft, ships, water crafts, as well as sub types in those categories.
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