Core private-sector machinery orders fell to their lowest ever in July amid weak demand from manufacturers, government data showed Thursday, adding to signs that corporate appetite for fresh capital spending is still weak.
Core orders, which exclude those for ships and from electric utilities, fell a seasonally adjusted 9.3 percent from a month ago to ¥664.7 billion, the lowest since April 1987, the oldest comparable data available.
It was the first decline in two months. The rate of fall was much faster than the average market forecast of a 3.6 percent contraction.
Japan's notoriously volatile machinery orders last hit a record low in May at ¥668.2 billion. They turned up in June, rising 9.7 percent.
"The pace of decline is getting moderate," the Cabinet Office said in its basic assessment of machinery orders, using the same expression since March.
The latest result came as orders from manufacturers turned negative, down 20.4 percent to ¥223.7 billion for the first fall in three months.
Orders from the nonferrous metal industry fell 85.7 percent due mainly to falls in such products as turbines for nuclear power plants and metal-processing machines. Those from general machinery makers slid 32 percent while orders from transport equipment makers except carmakers lost 50.1 percent on weak demand for aircraft and rolling stock.
Nonmanufacturers also performed poorly, with orders falling 2.8 percent to ¥439.6 billion for the first decrease in two months, led by the mining, telecommunications and transportation industries.
Core orders are widely seen as a leading indicator of corporate capital spending about six months ahead.