December Machinery Orders
Both Manufacturing and Non-Manufacturing Orders Suffer Major Declines, Falling Below Market Expectations
February 12, 2014
Summary
◆According to statistics for machinery orders in December 2013, the leading indicator for domestic equipment investment, private sector demand (excluding for shipbuilding and from electric power), suffered an m/m decline for the first time in three months at -15.7%, falling considerably below consensus (-4.0% m/m).
◆As for performance by source of demand, manufacturing industries registered an m/m decline for the first time in two months at -17.3%. Non-manufacturing orders (excluding for shipbuilding and from electric power) also suffered a m/m decline for the first time in three months at -17.2%.
◆Overseas orders achieved m/m growth for the first time in three months at +8.6%. However, considering the dramatic declines suffered in October and November of last year, results left something to be desired.
◆The CAO projected the first decline in four quarters in its Jan-Mar 2014 outlook, with private sector demand (excluding for shipbuilding and from electric power) seen down 2.9% in comparison with the previous period. By industry, manufacturing industries are expected to be down by 1.8% in comparison with the previous quarter, with non-manufacturing expecting a decline of 5.9%, reflecting the cautious tone.
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