Japan’s core private-sector machinery orders gained a seasonally adjusted 5 percent in February, recouping part of January’s 11.8 percent month-on-month decline thanks to a number of large orders, the Cabinet Office said Monday.
Orders from manufacturers fell, however, due mainly to a continued tumble in demand from electric machinery makers for semiconductor-manufacturing devices, said Yoshihiko Senoo, a senior official at the Cabinet Office’s Economic and Social Research Institute.
The government is thus sticking to its view that machinery orders, a leading indicator of corporate capital spending six to nine months ahead, are following a seesaw pattern. Last month, the Cabinet Office downgraded its assessment for machinery orders for the first time in five months.
The key orders, which exclude those for ships and from electric power companies to avoid volatility, stood at 1.015 trillion yen in the reporting month, up 5.9 percent from the year before for the 15th consecutive year-on-year increase.
“Moves ahead (of machinery orders) should be closely monitored, given that a recent survey on corporate capital investment plans for the current fiscal year showed a shrinking trend,” Senoo said.
Orders from manufacturers fell 0.9 percent in February from the previous month to 405.5 billion yen, and those by electric machinery makers, comprising the largest portion of total manufacturers’ orders at 31 percent, dropped 16.4 percent for the second straight month of double-digit decline.
Orders for chip-making machines plunged 49.5 percent in February from the year before for the largest drop since November 1998, after a 26.8 percent drop in January, Senoo said.
Large orders for machinery, such as those for building a chemical plant and an airport-related petroleum facility, however, helped reduce the drop in orders from manufacturers, he added.
Core orders from the nonmanufacturing sector, meanwhile, climbed 10.9 percent from the previous month to 616.7 billion yen, after January’s 9.3 percent slip.
Overall, orders rose 3.5 percent to 2.233 trillion yen, including public-sector orders, which fell 18.9 percent to 375.7 billion yen, and foreign orders, which rose 12.4 percent to 598.4 billion yen.
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