JP: Machine Orders


Wed Nov 08 17:50:00 CST 2017

Actual Previous
M/M Change -8.1% 3.4%
Y/Y Change -3.5% 4.4%

Highlights
Japan's private sector machinery orders (excluding volatile items) fell 8.1percent on the month (seasonally adjusted) in September after advancing 3.4 percent in August This was weaker than the consensus forecast for a decline of 2.4 percent. This series, which excludes orders for ships and those from electric power companies, is considered a proxy for capital expenditures. In original terms, machinery orders (excluding volatile items) fell 3.5 percent on the year in September after an increase of 4.4 percent in August.

The weakness in orders in September was broad-based. Manufacturing orders fell 5.1 percent on the month in September after an increase of 16.1 percent in August, while non-manufacturing orders (excluding volatile items) declined by 11.1 percent, after advancing 3.1 percent in August. Year-on-year growth in orders was steady in the manufacturing sector, up slightly from 14.7 percent to 14.8 percent, but fell by 13.3 percent for the non-manufacturing sector after dropping 2.8 percent in August..

Officials now estimate private sector machinery orders (excluding volatile items) grew by 4.7 percent on the quarter for the three months to September, well below their earlier forecast of 7.0 percent but still representing a solid rebound from the 4.7 percent decline recorded in the three months to June. Officials also expect orders to fall by 1.8 percent on the year in the three months to December after dropping by 1.0 percent in the three months to June and by 2.5 percent in the three months to September.

Definition
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.



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.