Japan's core machinery orders slump 19.5% in May

Jul 18, 2014

Seasonally adjusted core machinery orders slumped 19.5 percent in May from the previous month, the largest fall for any month since comparable data became available in April 2005, the Cabinet Office said Thursday.

 

Private-sector orders excluding those for ships and power equipment, closely watched as a leading indicator of corporate capital spending, came to ¥685.3 billion, the government agency said.

The May result was far worse than the 0.6 percent median increase estimated by 25 economic research institutes surveyed by Jiji Press. The Cabinet Office thus downgraded its assessment for the first time in three months, saying that the uptrend in machinery orders appears to be pausing.

Core orders dropped for the second straight month after posting record month-on-month growth of 19.1 percent in March. In April, the size of the drop came to 9.1 percent.

There is a growing possibility that core orders in April-June will drop quarter on quarter for the first time in five quarters, analysts said.

In May, machinery orders from manufacturers fell 18.6 percent from the previous month to ¥283.5 billion. Drops were seen in orders from 12 of the 15 sectors, including electric machinery makers, shipbuilders and chemical makers. Orders from the nonmanufacturing industry, excluding those for ships and power equipment, fell a record 17.8 percent to ¥427 billion.

Source: The Japan News

Tables: Cabinet Office