| Consensus | Consensus Range | Previous | |
| Month over Month | -5.0% | -6.5% to -0.7% | 8.7% |
| Year over Year | 13.7% | 12.2% to 16.6% | 15.6% |
Market Consensus Before Announcement
Japan’s core machinery orders, a key leading indicator of business investment in equipment and software, are expected to decline on the month in May after unexpectedly rising a month earlier. The decline is likely to reflect a reactionary pullback following April’s sharp increase, when orders from industries including shipbuilding surged.
Core machinery orders are projected to fall 5.0 percent on the month in May after rising 8.7 percent in April, supported by solid gains in computer orders. The Cabinet Office also maintained its assessment that machinery orders are “showing signs of a pickup.”
Capital spending is expected to remain resilient, supported by expectations of expanding demand for artificial intelligence technologies, with annual core machinery orders seen rising 13.7 percent in May after gaining 15.6 percent in April, expected to mark a sixth straight month of year-on-year growth.
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.