December machine orders excluding volatile ones for ships and those from electric power companies jumped a greater than expected 8.3 percent on the month and 12.0 percent from a year ago. For the year 2014, these orders were up 4.0 percent. These data are very volatile, especially since the sales tax was implemented in April. Orders are looked upon as a proxy for capital spending.
Total orders were up 8.6 percent on the month. Nonmanufacturing orders excluding volatile orders were up 7.2 percent after increasing 0.5 percent last time. Overseas orders however, dropped 6.9 percent after sliding 6.0 percent in November.
In the January to March period, the total amount of machine orders was forecast to decline 2.5 percent and private sector orders excluding volatile ones were expected to increase 1.5 percent from the previous quarter respectively. This forecast was basically made by summing up the figures from 280 machinery manufacturers.
The total value of new private-sector purchase orders placed with manufacturers for machines, excluding ships and utilities. It is a leading indicator of production. Rising purchase orders signal that manufacturers will increase activity as they work to fill the orders.
It is a leading indicator of production. Rising purchase orders signal that manufacturers will increase activity as they work to fill the orders. The importance of machinery orders cannot be overstated given the economy's dependence on exports. The purpose of these data is to get a picture of machinery manufacturers' order books and to collect basic material for analyzing the direction of the economy through an early understanding of trends in capital investment in machinery.
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