April 13, 2015
Summary
◆According to statistics for machinery orders in February 2015, the leading indicator for domestic capex, private sector demand (excluding shipbuilding and electrical power), were down by -0.4% m/m, while at the same time exceeding market consensus (-2.2%).
◆Looking at results by source of demand, the manufacturing industries by +0.9% m/m for the first time in two months. Meanwhile, non-manufacturing orders (excluding shipbuilding and electric power) declined for the first time in four months at -3.6% m/m. However, according to the 3-month moving average, the second consecutive month of growth was achieved. In other words, overall results were not so bad as to correct our basic assumption that orders are still in a growth trend.
◆According to the CAO outlook for the Jan-Mar 2015 period, private sector demand (excluding shipbuilding and electrical power) is expected to grow by +1.5% q/q, its third consecutive quarter of gains. This figure is considered to be achievable even if a decline of as much as -6.5% m/m is experienced in March. Hence there are no high hurdles to achieving further growth. DIR sees private sector demand (excluding shipbuilding and electrical power) showing clear signs of a comeback in the Jan-Mar 2015 period with q/q growth seen.
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