BUSINESS Japan's core private-sector machinery orders rise in February


Japan's core private-sector machinery orders rise in February


19:07, April 08, 2020


File photo: CGTN

TOKYO, April 8 (Xinhua) -- Japan's core private-sector machinery orders rose in February from a month earlier, the government said in a report on Wednesday.

According to the Cabinet Office, the orders, excluding those for ships and utilities because of their volatility, increased 2.3 percent in February from the previous month, marking the second successive month of increase.

The orders totaled 858.48 billion yen (7.88 billion U.S. dollars), in the reporting period, the Cabinet Office said, with weak orders in the iron and steel sectors propped up by demand for construction machinery and computers.

The Cabinet Office maintained its assessment of the orders that they were "stalling."

The current core orders in February came on the heels of a 2.9 percent increase in January, but the increases were not enough to shift the government's view on machinery orders.

"The second straight monthly rise, averaging around 2 percent, is not enough for the government to lift its view from stalling," a Cabinet Office official was quoted as saying.

"We don't see any particular effect of the new coronavirus in the February results," the official added.

When the effects of the coronavirus pandemic are factored into the data series next month, Cabinet Office Officials warned of an almost certain contraction.

The global coronavirus pandemic has led to factories shuttering operations on falling demand as supply chains have become increasingly disrupted. Businesses have also rethought their capital investment plans, which will likely see investments downwardly revised, analysts said.

Orders from manufacturers dropped 1.7 percent in the recording period to 373.83 billion yen (3.43 billion U.S. dollars), the Cabinet Office's data showed.

Those from non-manufacturers, excluding those for ships and from power companies, climbed 5.0 percent to 483.62 billion yen (4.44 billion U.S. dollars).

Orders from overseas, seen as an indicator of future exports, increased 2.7 percent to 890.65 billion yen (8.17 billion U.S. dollars), the government's data showed.

Total orders declined 6.9 percent to 2.22 trillion yen (20.38 billion U.S. dollars), meanwhile, with the orders comprising 238.96 billion yen (2.19 billion U.S. dollars) from the domestic public sector, which plummeted 39.1 percent from the previous month, the office also said.

Machinery orders are a key advance indicator for corporate capital spending and the government uses this key data to predict the strength of business spending in a six-to-nine-month period ahead.

A rise in capital expenditure here can boost the economy as Japanese companies are producing more machinery to meet rising demands from overseas markets.

A drop in such expenditure can have the reverse effect.

Such business investment accounts for roughly 15 percent of Japan's gross domestic product.

Types of machinery included in the monthly government survey comprise engines and turbines, heavy electrical machinery, electronic and communication equipment, industrial machinery, machine tools, railway rolling stock, road vehicles, aircraft, ships, water crafts, as well as sub types in those categories.

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