Core machinery orders rose a seasonally adjusted 4.8 percent in February from the previous month for the second straight month of increase, beating market forecasts of a mild fall and suggesting a recovery in corporate capital spending, government data showed Wednesday.
The total, excluding orders for ships as well as from utilities because of their volatility, came to ¥794.0 billion, the biggest since August, when it stood at ¥804.9 billion, the Cabinet Office said.
The recovery indicates companies are now seeing little impact from the massive flooding in Thailand last fall, which disrupted supply chains for manufacturers, triggering a fall in output among Japanese carmakers and electric machinery makers with production bases there.
Machinery orders have been in a “trend of moderate increase,” the office said, revising upward its basic assessment of the reading. For January, it said orders were “seesawing.”
“Capital spending by companies is expected to pick up, although the pace will be moderate,” Mitsumaru Kumagai, chief economist at the Daiwa Institute of Research, said in his report.
While noting wariness among some industries, Kumagai said that “a tail wind can be felt,” pointing to eased tensions over the sovereign debt crisis in Europe and signs of firmness in the U.S. economic recovery.
Machinery orders from manufacturers grew 16.0 percent, the sharpest gain since October 2009, to ¥357.9 billion for the first increase in three months. Those from nonmanufacturers were up 2.3 percent to ¥432.6 billion.