JP: Machine Orders


Wed Jul 08 18:50:00 CDT 2015

Consensus Actual Previous
M/M Change -5.0% 0.6% 3.8%
Y/Y Change 16.5% 19.3% 4.4%

Highlights
May seasonally adjusted machine orders (excluding volatile items) advanced for a third consecutive month. They were up 0.6 percent on the month and 25.6 percent on the year. Core orders were up 19.3 percent based on the original series. This was in stark contrast to expectations of a 5.0 percent drop.

Core machine orders are considered a proxy for private capital expenditures. The upward move followed a 3.8 percent gain a month before. The government repeated its assessment that machine orders are picking up.

Nonmanufacturing orders excluding volatile items declined 4.0 percent while manufacturing orders jumped 9.9 percent. All orders including volatile items dropped 6.2 percent on the month. Manufacturing orders likely softened on weaker export demand while the sluggish domestic economy weighs on nonmanufacturers."

Core machine orders are considered a proxy for private capital expenditures. The upward move followed a 3.8 percent gain a month before. The government repeated its assessment that machine orders are picking up.

Definition
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.

Description
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.