Japan’s Sept machinery orders fall-signs of recession
2022.11.16 01:59
Japan’s Sept machinery orders fall-signs of recession
Budrigannews.com -Orders for machinery in Japan unexpectedly fell amid signs that the slowdown in the global economy and rising import costs are negatively affecting companies’ investment plans.
The main orders are considered a barometer of capital investments for the next six to nine months, a series of data with high volatility fell by 4.6% compared to the previous month, data from the Cabinet of Ministers showed.
That followed a 5.8 percent drop in March, which was weaker than economists’ average forecast of 0.7 percent growth in a Reuters poll.
Compared with the previous year, the main orders excluding volatile indicators in the shipping and electricity sectors increased by 2.9% in January, the data show.
Manufacturers surveyed by the Cabinet expect core orders to grow 3.6% month-on-month after falling 3.6% in the previous quarter.
The government lowered its forecast for car orders for the first time since January, saying the recovery has stalled.
Earlier, the government said that there are signs that the economy is gaining momentum.
“Given the manufacturers’ forecast for the month and solid corporate earnings, capital investment is expected to grow as a trend,” said Takumi Tsunoda, chief economist at the Central Bank Research Institute.
It also said that companies are expected to gradually implement investment plans, many of which have been postponed due to supply chain disruptions, but risks are still ahead.
“The outlook for the economy is uncertain, as risks such as a slowdown in global economic growth and rising energy prices may cool corporate sentiment, especially investment sentiment among small and medium-sized companies,” he added.
By sector, orders from manufacturers fell by 8.5% compared to the previous month, due to non-ferrous metals, while orders from non-manufacturers increased by 4.4%, mainly in the field of information services and communications.
The data on car orders came a day after the third quarter showed that the Japanese economy unexpectedly contracted.
To soften the economic blow from rising commodity prices, the government last month prepared a stimulus package of 29 trillion yen ($208.66 billion) in additional spending.
