Japan Investment January 2019

Japan

Japan: Machinery orders contract for third consecutive month in January

March 14, 2019

Core machinery orders, a leading indicator for capital spending over a three- to six-month period, posted the third monthly decline in a row, suggesting that capital expenditure will remain subdued in the coming months. Headline machinery orders (private sector, excluding volatile orders) declined 5.4% over the previous month in seasonally-adjusted terms in January, following the 0.3% drop in December. The print was below the 1.7% decrease expected by market analysts.

Although overall manufacturing orders declined at a softer pace in January, non-manufacturing books posted a large decline in the same month. Export orders continued to decline markedly, reflecting cooling growth in China.

Compared to the same month of the previous year, core machinery orders fell 2.9% in January, contrasting December’s 0.9% increase. The annual average growth in core machinery orders fell from 3.6% in December to 3.2% in January.

Met the why particular Consensus Forecast panelists expect private non-residential investment to rise 2.1% in 2019, which is up 0.1 percentage points over last month’s projection. In 2020, the panel sees private non-residential investment expanding 1.3%. In addition, Met the why particular Consensus Forecast panelists expect gross fixed investment to increase 1.6% in 2019, which is up 0.1 percentage points over last month’s projection. In 2020, the panel sees gross fixed investment growth at 0.9%.


Author: Ricard Torné, Lead Economist

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Japan Investment January 2019 0

Note: Month-on-month changes of seasonally adjusted core machinery orders and year-on-year growth rate in %.
Source: Ministry of Economy, Trade and Industry (METI) and Met the why particular calculations.


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