Japan’s core private-sector machinery orders fell 8.5% in February from the previous month for the second straight monthly decline, reflecting a slow recovery from the impact of the coronavirus pandemic, government data showed Wednesday.
The Cabinet Office downgraded its assessment for the first time in eight months, saying orders were “showing signs of stalling in their recovery.” Previously, the office had said that orders — a leading indicator of capital expenditure — were “picking up.”
A recovery in capital spending, which was postponed due to the spread of the new coronavirus, appears to have come into a lull, analysts said.
Following a 4.5% decline in January, the orders, which exclude those for ships and from electricity utilities due to their volatility, totaled ¥769.80 billion, according to the Cabinet Office.
The 8.5% plunge was the largest since a 10.2% fall logged in April last year when the government declared the first state of emergency over the pandemic from that month through May.
The February result compared with a median estimate of a 2.5% rise by 19 economic research institutes surveyed by Jiji Press. Their estimates ranged from a fall of 1.9% to a rise of 5.1%.
Orders from manufacturers fell 5.5% to ¥342.56 billion, following a 4.2% slide in January, suppressed by large decreases from nonferrous metal makers and food and beverage producers.
Orders from nonmanufacturers dropped 10.9% to ¥422.72 billion, after falling 8.9% in the previous month, with orders in the transportation sector shrinking in a reflection of weakening demand amid the pandemic.
Orders from both the manufacturing and nonmanufacturing sectors were down for the second consecutive month.
“Orders that had been postponed since spring last year strongly emerged around October through December. But such moves are likely to have been pausing recently,” a government official told reporters.
“Due to a delay in COVID-19 vaccinations in Japan compared with other countries, orders from nonmanufacturers, especially the service sector, are unlikely to grow,” Shintaro Inagaki, market economist at Mizuho Securities Co., said.
In the reporting month, orders from overseas, seen as an indicator of future exports, jumped 76.2% to ¥1.81 trillion, up for the fifth successive month, boosted by four big-ticket orders including one totaling a few hundred billion yen or more.
Total orders surged 26.4% to ¥3.03 trillion, following a 1.7% fall in January. Those from the public sector were also up 17.0% to ¥257.09 billion, after sagging 27.9% in the previous month.
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