Japan’s core private-sector machinery orders unexpectedly rose in November, up 5.7 percent from the previous month, lifted by increased orders from the services sector, government data showed Wednesday.
The orders, which exclude those for ships and from utilities because of their volatility, grew for the second straight month to ¥899.2 billion ($8.1 billion), the highest since June 2008.
The rise came after a 5 percent jump in October, adding to bright signs for an economy that expanded for a seventh straight quarter through September. Market analysts had forecast a decline of around 1 percent.
The Cabinet Office retained its assessment that machinery orders, widely viewed as an indicator of future capital spending by companies, continued to show “signs of picking up.”
The Cabinet Office said the result was better than expected and may have reflected the strong economic environment.
But one of its officials also said, “If we look at how machinery orders have moved over the past three months, the pace of growth itself is not so rapid, on balance.”
Orders from the nonmanufacturing sector surged 9.8 percent to ¥480.8 billion as demand was particularly strong in the transport and postal services industry. They ordered vehicles and computer equipment, the survey showed.
Those from manufacturers dipped 0.2 percent to ¥420.6 billion, mainly dragged down by a fall in the chemical sector, which saw a sharp increase in October.
For the three months through December, core machinery orders are expected to drop 3.5 percent, according to the Cabinet Office, though they have been rising more strongly than initially estimated.
Japanese firms have been gradually increasing their investment in factories and equipment to boost output capacity and in automation technology to cope with labor shortages.
Overseas demand for Japanese machinery, an indicator of future exports, increased 4.9 percent to ¥1.10 trillion for the second straight monthly gain.
Total orders, including those from the domestic public sector and abroad, were up 11.8 percent to ¥2.74 trillion, expanding for the second consecutive month.
A recovery in goods exports has driven corporate profits and business investment, and the latest core machinery orders suggest that nonmanufacturing firms are also becoming more confident about the business outlook.
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