Japan's core private-sector machinery orders fall 2.9 pct in September

Source: Xinhua | 2019-11-12

Japan's core private-sector machinery orders dropped in September from a month earlier, the government said in a report on Monday, owing to falling demand from the non-ferrous metal sector.
According to the Cabinet Office, the orders, excluding those for ships and utilities because of their volatility, fell 2.9 percent in September from the previous month.
The orders totaled 850.19 billion yen (7.8 billion U.S. dollars) in the recording month, the government's data showed.
The drop in core orders led to the Cabinet Office downgrading its assessment for the first time since last December stating that they are "showing signs of stalling in their recovery."
This compares to the office's assessment until August that machinery orders were "showing signs of picking up."
Orders from manufacturers dropped 5.2 percent to 360.38 billion yen (3.30 billion U.S. dollars), the Cabinet Office said, with orders from nonferrous metals, nuclear power-related equipment and computer sectors seeing a notable downturn in the recording period.
Those from non-manufacturers, however, excluding ships and electric utilities, rose 2.6 percent to 489.82 billion yen (4.49 billion U.S. dollars), owing to an uptick in contributions from the information and communications sector, the office said.
Overseas orders, which act as a barometer of future exports, dropped 12.6 percent to 852.95 billion yen (7.82 billion U.S. dollars), the government's data showed, as orders for industrial machinery and motors retreated.
Total orders, including those in the public sector, fell 18.7 percent to 2.14 trillion yen (19.63 billion U.S. dollars) in the recording period, the Cabinet Office said in its latest report, as overseas demand waned.
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.
A drop, however, as was the case in the recording period, has the opposite effect and weighs on the economy and can see production tapered or significantly reduced.
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 those categories.