| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Month over Month | -11.3% | -15.0% to -5.4% | -9.1% | 13.0% |
| Year over Year | 2.9% | -2.4% to 9.0% | 6.6% | 8.4% |
Highlights
Key points:
--Japanese core machinery orders -9.1% m/m, their first drop in three months, due largely to a pullback in strong demand for computers from electric machine makers and the financial industry as well as orders for X-ray equipment from general machinery producers. The same items propelled March orders to post an unexpected 13.0% jump to a more than 17-year high of ¥1.01 trillion, which was basically caused by a distortion in seasonal adjustments.
--The key leading indicator of business investment in equipment and software is backed by plans to digitize and automate operations but widespread labor shortages and elevated costs are hampering smooth implementation of some of those plans.
--The Cabinet Office maintained its assessment after upgrading it in the November report, saying, Machinery orders are showing signs of a pickup. The official projection made last month called for a 2.1% pullback in Q2 vs. a better-than-expected solid 3.9% rise in Q1.
--Core orders marked their seventh consecutive y/y gain, +6.6%, vs. +8.4% the previous month. The core reading tracks the private sector and excludes volatile orders from electric utilities and for ships.
--Japanese core machinery orders -9.1% m/m, their first drop in three months, due largely to a pullback in strong demand for computers from electric machine makers and the financial industry as well as orders for X-ray equipment from general machinery producers. The same items propelled March orders to post an unexpected 13.0% jump to a more than 17-year high of ¥1.01 trillion, which was basically caused by a distortion in seasonal adjustments.
--The key leading indicator of business investment in equipment and software is backed by plans to digitize and automate operations but widespread labor shortages and elevated costs are hampering smooth implementation of some of those plans.
--The Cabinet Office maintained its assessment after upgrading it in the November report, saying, Machinery orders are showing signs of a pickup. The official projection made last month called for a 2.1% pullback in Q2 vs. a better-than-expected solid 3.9% rise in Q1.
--Core orders marked their seventh consecutive y/y gain, +6.6%, vs. +8.4% the previous month. The core reading tracks the private sector and excludes volatile orders from electric utilities and for ships.
Market Consensus Before Announcement
Key forecast points: core orders-11.3% m/m, partly due to weaker exports amid trade conflicts but largely in playback for an unexpected +13.0% in March caused by a distortion in seasonal adjustments; the official projection for Q2 core orders -2.1% q/q vs. a solid +3,9% in Q1.
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.
