Machine orders excluding volatile items such as ships and those from electric power companies rose 4.9 percent on the month after an increase of 8.3 percent in June. This increase was well above the consensus forecast for a fall of 3.5 percent and is the first time orders have risen in consecutive months since December 2015 and January 2016.
On the year, machine orders rose 9.4 percent after an increase of 1.1 percent last time. This series is considered a proxy for capital expenditures. Officials forecast this core measure of orders to increase by 5.2 percent in the three months to September, compared with a fall of 9.2 percent in the previous 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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