Japan’s core private-sector machinery orders rose 2.3 percent in February from the previous month for a second straight monthly increase but the government retained its assessment Wednesday that orders are “stalling” with a coronavirus-linked contraction looming.
The orders, which exclude those for ships and from electric utilities due to their volatility, totaled ¥858.48 billion ($7.9 billion), according to the Cabinet Office, helped by demand for computers and construction machinery that offset weak orders in the chemicals as well as iron and steel sectors.
The increase in machinery orders, seen as a leading indicator of capital expenditure, followed a 2.9 percent climb in January.
“The second straight monthly rise, averaging around 2 percent, is not enough for the government to lift its view (from stalling),” a Cabinet Office official said.
“We don’t see any particular effect of the new coronavirus in the February results,” the official said, adding that since the survey is based on medium- to long-term corporate investment plans, it is unlikely that a relatively recent issue such as the coronavirus pandemic fallout is reflected.
Analysts said the result for March will show a clearer effect of the pandemic on machinery orders as the worldwide outbreak has dented domestic demand and stalled capital investment plans.
In the reporting month, orders from manufacturers fell 1.7 percent to ¥373.83 billion, while orders from nonmanufacturers, excluding those for ships and from power companies, rose 5.0 percent to ¥483.62 billion.
Orders from overseas, seen as an indicator of future exports, rose 2.7 percent to ¥890.65 billion.
Total orders fell 6.9 percent to ¥2.22 trillion, including ¥238.96 billion from the domestic public sector, which fell 39.1 percent from the previous month.