Japan’s machinery orders fall despite AI and semiconductor demand
Japan’s private-sector machinery orders fell 3.7% in July, while electrical machinery orders rose 46.1% amid strong demand for artificial intelligence and semiconductors.
- Japan's core machinery orders, a key indicator of capital spending, fell by 3.7% in July from the previous month.
- Despite the overall drop, orders for electrical machinery surged by 46.1%, fueled by strong demand for artificial intelligence and semiconductors.
- The headline decline was heavily influenced by an 82.2% fall in orders from the non-ferrous metal industry, following an unusually large order in the prior month.
- Orders from both the broader manufacturing and non-manufacturing sectors decreased.
Japan’s seasonally adjusted core machinery orders fell 3.7% in July from June to 1,016.9 billion yen, after rising 9.7% in the previous month, the Cabinet Office reported on Wednesday (September 16).
The private-sector measure, which excludes orders for ships and power equipment, is closely watched as a leading indicator of corporate capital spending.
The Cabinet Office left its basic assessment unchanged, saying machinery orders were “showing signs of picking up”.
It said the July decline mainly reflected June’s increase, which had been led by a large-scale order.
Electrical machinery makers recorded a 46.1% increase in orders, reflecting strong demand for artificial intelligence and semiconductors.
In contrast, orders from the non-ferrous metal industry fell 82.2% after the sector placed a large nuclear power-related order in the previous month.
Overall orders from manufacturers decreased 1.0% to 518.6 billion yen, while those from non-manufacturers fell 2.6% to 525.9 billion yen.
Within the non-manufacturing sector, telecommunications orders dropped 23.2%, partly because orders for high-voltage power receiving and transforming equipment declined.
Finance and insurance orders were down 6.8% as investment in digitisation fell after increasing in the previous month.
Total machinery orders, including those from the public sector and overseas, declined 5.5% to 4,195.7 billion yen.
[Copyright The Jiji Press, Ltd.]
