Jiji PressTOKYO (Jiji Press) — The country’s seasonally adjusted core machinery orders in May fell 3.6 percent from the previous month, down for the second straight month, reflecting sluggish demand from non-manufacturers, the Cabinet Office said Monday.
On the basis of the result, the government agency downgraded its basic assessment of machinery orders for the first time in eight months, saying that machinery orders have stalled.
The previous evaluation had said that moves toward recovery have stalled.
Private-sector orders excluding those for ships and power equipment, closely watched as a leading indicator of corporate capital spending, came to ¥805.5 billion.
The May result, which followed a 3.1 percent decrease in April, came against a median estimate of a 1.6 percent rise in a Jiji Press poll of 20 economic research institutes. Their estimates ranged from a fall of 2.0 percent to a rise of 5.0 percent.
Core machinery orders from non-manufacturers dropped 5.1 percent, down for the third month in a row, dragged down by a fall in systems-related orders and rolling stock renewal demand from the transport and postal services sector. Construction and telecommunications firms were also slow to place orders.
Machinery orders from manufacturers grew 1.0 percent, up for the fourth consecutive month, on the back of higher engine demand from shipbuilders and growth in industrial machinery from the “other manufacturing” sector.
“Non-manufacturers’ corporate stances may be becoming cautious” a Cabinet Office official said, noting that machinery demand from manufacturers is “firm.”