Japan's core private-sector machinery orders fall 2.4 pct. in August

Source: Xinhua | 2019-10-11

Japan's core private-sector machinery orders dropped in August from a month earlier marking the second successive month of decline, the government said in a report on Thursday.
According to the Cabinet Office, the orders, excluding those for ships and utilities because of their volatility, fell 2.4 percent in August from the previous month.
The orders totaled 875.25 billion yen (8.14 billion U.S. dollars) in the recording month, the government's data showed.
The drop in core orders in the recording period comes on the heels of a 6.6 percent decline logged in July, with the office's most recent data showing demand from both the information services and nonferrous metal sectors had dropped significantly.
The Cabinet Office, despite the downward trend, maintained its assessment of the orders, stating that they are showing "signs of picking up."
Orders from manufacturers dropped 1.0 percent to 380.19 billion yen (3.53 billion U.S. dollars), the office said, with the drop partly attributable to slumping demand for machinery to process metals from the nonferrous metals sector as well as falling demand for equipment linked to nuclear power.
Those from non-manufacturers, excluding ships and electric utilities, dropped 8.0 percent to 477.32 billion yen (4.44 billion U.S. dollars) as demand from information services and construction sectors waned in the reporting month, the office said.
Overseas orders, meanwhile, which act as a barometer of future exports, climbed 21.3 percent to 975.74 billion yen (9.08 billion U.S. dollars), owing to an increase in big-ticket orders for computers and railway cars among others, the government's data showed.
Total orders, including those in the public sector, rose 11.8 percent to 2.63 trillion yen (24.48 billion U.S. dollars), in the recording period, the Cabinet Office said in its latest report.
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 here can boost the economy as Japanese companies are producing more machinery to meet rising demand from overseas markets. A decline, however, has the opposite effect.
Such business investment accounts for roughly 15 percent of Japan's gross domestic product.
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 these categories.