June machine orders excluding volatile items such as ships and those from electric power companies were up 8.3 percent on the month after declining 1.4 percent in May. It was the first monthly increase since March. On the year, machine orders were up 1.1 percent after sinking 12.7 percent last time. This series is considered a proxy for capital expenditures.
According to the government, machine orders are at a standstill. The government projects that core machine orders will increase 5.2 percent in the July through September quarter.
Machine Orders are the total value of new private-sector purchase orders placed with manufacturers for machines excluding volatile items such as ships and utilities. It is a leading indicator of production. Analysts consider the data an indicator of capital spending. 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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