July 10, 2014
Summary
◆According to statistics for machinery orders in May 2014, the leading indicator for domestic capex, private sector demand (excluding shipbuilding and electric power), fell for the second time in two months, down -19.5% m/m. Figures were well below market consensus (+0.7%), hence setting a negative tone.
◆As for performance by source of demand, manufacturing industries suffered a decline for the second time in two months at -18.6%, while non-manufacturing orders (excluding shipbuilding and electrical power) fell for the first time in three months by -17.8% m/m. Overseas orders suffered major m/m declines due to a reactionary decline after the growth of the previous month at -45.9%.
◆Both the manufacturing and non-manufacturing industries show corporate business results as clearly improving, and there is a growing sense that capex in the non-manufacturing industries is deficient. Hence machinery orders are expected to recover their growth trend in June after May’s declines.
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