Core private-sector machinery orders rose a weaker-than-expected 7.6 percent in October from the previous month, government data showed Wednesday, suggesting capital expenditure is leveling off from its recent highs.
The Cabinet Office downgraded its assessment of the orders, which exclude those for ships and utilities because of their volatility, saying they are “showing signs of stalling in their recovery.”
The orders, which came to ¥863.2 billion ($7.6 billion), fell short of mounting a convincing comeback after a record 18.3 percent fall in September.
“We had been monitoring whether the preceding month’s sharp drop was a sign of temporary weakness, but this data shows that orders aren’t back at their previous level,” a Cabinet Office official told reporters.
Private-sector machinery orders are considered a leading indicator of capital expenditure, which had been boosted by strong corporate profits and served as one of the main drivers of growth in the domestic economy.
But a string of natural disasters in the summer caused business spending to plummet, pushing the economy into the sharpest contraction in more than four years in the July-September quarter.
Orders from the manufacturing sector in October climbed 12.3 percent to ¥422.6 billion amid increased demand for equipment from oil and coal, automobile and chemical firms.
From the nonmanufacturing sector, orders, excluding those from shipbuilders and power companies, grew 4.5 percent to ¥453.7 billion.
Total orders including those from the domestic public sector and abroad, rose 19.5 percent to ¥2.63 trillion.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.