July core machine orders that exclude volatile items such as ships and those from electric power companies were down 3.6 percent on the month after declining 7.9 percent in June. Total orders were up 2.2 percent on the month and up 11.9 percent from a year ago.
Core machine orders are considered a proxy for private capital expenditures. They declined for a second month in July. The government downgraded its view and said the pickup in machine orders is stalling.
Nonmanufacturing orders excluding volatile items declined 6.0 percent after edging up 0.6 percent in June while manufacturing orders dropped 5.3 percent after sinking 14.0 percent. Manufacturing orders likely softened on continued weaker export demand while the sluggish domestic economy weighs on nonmanufacturers.
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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