Japan’s core machinery orders in July experienced a slight decline of 0.1% compared to the previous month, according to the Cabinet Office. These private-sector orders, which exclude those for ships and power equipment, are closely monitored as an indicator of corporate capital spending. In June, these orders had risen by 2.1%, reaching ¥874.9 billion.
The Cabinet Office has stated that the growth in machinery orders has come to a halt, maintaining this assessment for the third consecutive month. Orders from manufacturers specifically saw a significant drop of 5.7% to ¥398.4 billion in July after experiencing a slight decrease of 0.3% in June, which was partially supported by a large-scale order. machinery orders from manufacturers have remained sluggish since April.
On the other hand, core orders from nonmanufacturers witnessed substantial growth of 7.5% to ¥484.4 billion in July compared to an increase of 2.4% in June.
This growth can be attributed to robust orders placed by transportation and postal services providers for communications equipment and increased demand for computers and other items from the finance and insurance sector due to active digital-related investments.
In total, machinery orders including those from the public sector and overseas remained nearly unchanged at ¥3,053.5 billion.
These figures indicate that Japan’s machinery industry is facing challenges with declining manufacturing sector demand but is finding some stability through nonmanufacturing sectors’ investments in digital-related technologies.
