JP: Machine Orders


Wed Oct 07 18:50:00 CDT 2015

Consensus Actual Previous
M/M Change 3.2% -5.7% -3.6%
Y/Y Change -5.2% 2.9%

Highlights
Core machine orders retreated for a third month in August. Core machine orders sank 5.7 percent on the month expectations were for an increase of 3.2 percent. The monthly decline followed drops of 3.6 percent in July and 7.9 percent in June. On the year, orders were 5.2 percent lower. Total orders plunged 14.6 percent.

Manufacturing orders slid 3.2 percent while nonmanufacturing orders dropped 6.1 percent on the month. In an indication of weak international trade, overseas orders plummeted 26.1 percent on the month.

Needless to say, the government downgraded its view said orders are marking time. Core machine orders are considered a proxy for private capital expenditures.

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.