The country's core private-sector machinery orders rose 17.1% in October from the previous month, the sharpest increase on record, as the economy recovered from the initial impact of the coronavirus pandemic, government data showed Wednesday.
The orders, which exclude those for ships and from electricity utilities due to their volatility, stood at ¥842.53 billion ($8.1 billion), the Cabinet Office said. The pace of increase was the fastest since comparable data became available in April 2005, topping the previous record of 14.8% growth marked in January 2008.
The office upgraded its assessment of the reading, saying machinery orders, seen as a leading indicator of capital spending, "have bottomed out." In the previous month, it said they were "bottoming out."
Following a 4.4% drop in September, orders recovered to the ¥800 billion level for the first time since March, when the economy had yet to see the fallout from a state of emergency imposed between April and May following the spread of the virus.
The emergency declaration dealt a serious blow to the world's third-largest economy, hurting private consumption and capital spending.
"Investment for machinery had been suppressed amid the pandemic. But as economic activity has resumed, it has been gradually growing," a government official told reporters, while expressing caution given the volatility of the survey.
Orders from manufacturers expanded 11.4% to ¥353.54 billion, up for the second straight month, led by the nonferrous metal and chemical sectors.
Those from nonmanufacturers surged 13.8% to ¥484.00 billion for the second consecutive monthly increase, largely contributed to by such industries as financial and insurance services as well as wholesale and retail trade.
Total orders were up 9.7% to ¥2.30 trillion, after they fell 4.4% in September.
Orders from the public sector plummeted 22.7% to ¥248.31 billion, the first drop in three months.
Those from overseas, seen as an indicator of future exports, grew 20.7% to ¥924.37 billion, following the previous month's 16.7% plunge.
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