| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Month over Month | 1.0% | -2.3% to 2.7% | 1.4% | -0.5% |
| Year over Year | -3.5% | -6.1% to -2.6% | -2.2% | -7.7% |
Highlights
Key points from machinery orders data:
--Japan September core machine orders post 1st rise in 3 months on service sector demand for computers; manufacturer orders down
--Core orders slip q/q in July-September but smaller than officially forecast
--October-December orders projected to show slight rebound
--Cabinet Office keeps view: machine orders pausing
Japanese core machinery orders, the key leading indicator of business investment in equipment, rebounded an above-forecast 1.4 percent on the month in September after a slight 0.5 percent dip in August, as continued demand for computers from services providers including leasing, financial and telecom firms more than offset lower manufacturer orders for chemical and production equipment, data released Thursday by the Cabinet Office showed.
Core orders marked their seventh straight decline from a year earlier, down 2.2 percent, with the pace of decline decelerating from 7.7 percent in August. In contrast to strong capital investment plans for fiscal 2023, actual implementation has been slower than expected amid global uncertainty.
Capital investment is supported by demand for automation amid labor shortages as well as government-led digitization and emission control. The Bank of Japan's quarterly Tankan business survey for September showed large corporations revised up their plans for investment in equipment slightly for fiscal 2023 that began in April, as largely expected, and smaller firms raised their capex plans much more sharply than forecast.
Econoday's Relative Performance Index (RPI) stood at minus 11, below zero, which indicates the Japanese economy is performing slightly worse than expected. Excluding the impact of inflation, the RPI was at minus 4.
Core private-sector machinery orders, which exclude volatile orders from electric utilities and for ships, rose 1.4 percent from the previous month on a seasonally adjusted basis to ¥852.9 billion in September after slipping 0.5 percent to ¥840.7 billion in August, falling 1.1 percent to ¥844.9 billion in July, rising 2.7 percent to ¥854.0 billion in June and plunging 7.6 percent to ¥831.5 billion in May, which was the lowest amount since ¥825.2 billion in February 2022. The increase in September was higher than the median economist forecast of a 1.0 percent rise (forecasts ranged from a 2.3 percent drop to a 2.7 percent gain).
Orders from manufacturers fell 1.8 percent on the month in September after rising 2.2 percent in August and falling 5.3 percent in July while those from non-manufacturers in the core measure rose 5.7 percent after falling 3.8 percent in August for the first drop in three months.
The increase in core orders in September was led by higher demand for computers from leasing firms, the financial industry and telecom service providers as well as orders for computers from electric machinery makers and engines from shipyards. On the downside, lower orders came from chemical producers for separators and from production machinery makers for cranes and conveyors.
The Cabinet Office maintained its assessment after downgrading it in January for the November 2022 data, saying,"Machinery orders are pausing."
Core orders fell 1.8 percent on quarter in the July-September quarter, coming in firmer than the official forecast of a 2.6 percent decrease provided in August. It followed a 3.2 percent dip in April-June, a 2.6 percent rebound in January-March and a 4.7 percent drop in October-December.
The Cabinet Office forecast that core orders would edge up 0.5 percent in the October-December quarter, led by a solid rebound in orders from the non-manufacturing sector, which is expected to offset a second straight quarterly drop in those from the manufacturing sector.
Core orders fell 2.2 percent from a year earlier in September for the seventh straight decline after falling 7.7 percent in August and plunging 13.0 percent in July, which was partly in reaction to a sharp 12.8 percent gain seen in July 2022. It followed decreases of 5.8 percent in June, 8.7 percent in May, 5.9 percent in April and 3.5 percent in March and a 9.8 percent jump in February. It was firmer than the median economist forecast of a 3.5 percent drop. Forecasts ranged from 6.1 percent to 2.6 percent falls.
--Japan September core machine orders post 1st rise in 3 months on service sector demand for computers; manufacturer orders down
--Core orders slip q/q in July-September but smaller than officially forecast
--October-December orders projected to show slight rebound
--Cabinet Office keeps view: machine orders pausing
Japanese core machinery orders, the key leading indicator of business investment in equipment, rebounded an above-forecast 1.4 percent on the month in September after a slight 0.5 percent dip in August, as continued demand for computers from services providers including leasing, financial and telecom firms more than offset lower manufacturer orders for chemical and production equipment, data released Thursday by the Cabinet Office showed.
Core orders marked their seventh straight decline from a year earlier, down 2.2 percent, with the pace of decline decelerating from 7.7 percent in August. In contrast to strong capital investment plans for fiscal 2023, actual implementation has been slower than expected amid global uncertainty.
Capital investment is supported by demand for automation amid labor shortages as well as government-led digitization and emission control. The Bank of Japan's quarterly Tankan business survey for September showed large corporations revised up their plans for investment in equipment slightly for fiscal 2023 that began in April, as largely expected, and smaller firms raised their capex plans much more sharply than forecast.
Econoday's Relative Performance Index (RPI) stood at minus 11, below zero, which indicates the Japanese economy is performing slightly worse than expected. Excluding the impact of inflation, the RPI was at minus 4.
Core private-sector machinery orders, which exclude volatile orders from electric utilities and for ships, rose 1.4 percent from the previous month on a seasonally adjusted basis to ¥852.9 billion in September after slipping 0.5 percent to ¥840.7 billion in August, falling 1.1 percent to ¥844.9 billion in July, rising 2.7 percent to ¥854.0 billion in June and plunging 7.6 percent to ¥831.5 billion in May, which was the lowest amount since ¥825.2 billion in February 2022. The increase in September was higher than the median economist forecast of a 1.0 percent rise (forecasts ranged from a 2.3 percent drop to a 2.7 percent gain).
Orders from manufacturers fell 1.8 percent on the month in September after rising 2.2 percent in August and falling 5.3 percent in July while those from non-manufacturers in the core measure rose 5.7 percent after falling 3.8 percent in August for the first drop in three months.
The increase in core orders in September was led by higher demand for computers from leasing firms, the financial industry and telecom service providers as well as orders for computers from electric machinery makers and engines from shipyards. On the downside, lower orders came from chemical producers for separators and from production machinery makers for cranes and conveyors.
The Cabinet Office maintained its assessment after downgrading it in January for the November 2022 data, saying,"Machinery orders are pausing."
Core orders fell 1.8 percent on quarter in the July-September quarter, coming in firmer than the official forecast of a 2.6 percent decrease provided in August. It followed a 3.2 percent dip in April-June, a 2.6 percent rebound in January-March and a 4.7 percent drop in October-December.
The Cabinet Office forecast that core orders would edge up 0.5 percent in the October-December quarter, led by a solid rebound in orders from the non-manufacturing sector, which is expected to offset a second straight quarterly drop in those from the manufacturing sector.
Core orders fell 2.2 percent from a year earlier in September for the seventh straight decline after falling 7.7 percent in August and plunging 13.0 percent in July, which was partly in reaction to a sharp 12.8 percent gain seen in July 2022. It followed decreases of 5.8 percent in June, 8.7 percent in May, 5.9 percent in April and 3.5 percent in March and a 9.8 percent jump in February. It was firmer than the median economist forecast of a 3.5 percent drop. Forecasts ranged from 6.1 percent to 2.6 percent falls.
Market Consensus Before Announcement
Japanese core machinery orders, the key leading indicator of business investment in equipment, are forecast to rebound 1.0 percent on the month in September for the first rise in three months after dipping 0.5 percent in August (some economists expect a continued fall). In contrast to strong capital investment plans for fiscal 2023, actual implementation has been cautious amid global uncertainty. Core private-sector machinery orders, which exclude volatile orders from electric utilities and for ships, are expected to fall 3.5 percent on the year for a 7th straight drop after falling 7.7 percent in August. Last month, the Cabinet Office maintained its assessment, saying,"Machinery orders are pausing."
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.
