Core machine orders are considered a proxy for private capital expenditures. In February, machine orders excluding volatile ones were down only 0.4 percent analysts expected them to drop 2.8 percent. The monthly decline was an improvement from a 1.7 percent drop in January. On the year, orders were up 6.3 percent.
Despite unprecedented monetary and fiscal assistance plus attempts at structural reform, many are not convinced of an imminent economic recovery. Despite beating forecasts the report largely confirms the misgivings seen two weeks ago in the Bank of Japan's closely-watched Tankan survey, which surveyed more than 10,000 firms and found that business spending plans were at their weakest in two years.
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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