April core machine orders which exclude volatile items surprised and were up a monthly 3.8 percent expectations were for a drop of 2.6 percent. From a year ago, orders were up 4.4 percent against forecasts of a 2.1 percent decline. Core machine orders are considered a proxy for private capital expenditures. The upward move followed a 2.9 percent gain a month before.
The weaker yen is helping to support export competitiveness and manufacturing orders. However, nonmanufacturing orders were weak because of weak domestic demand. The April data came a few days after revisions to first quarter GDP showed that the economy grew by an annualized 3.9 percent in the March quarter.
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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