March 11, 2015
Summary
◆According to statistics for machinery orders in January 2015, the leading indicator for domestic capex, private sector demand (excluding shipbuilding and electrical power), were down by -1.7% m/m, while at the same time exceeding market consensus (-4.0%). Compared to the major growth of the previous month, the current month’s decline is a limited one, and machinery orders are expected to continue moving toward a comeback in the coming months.
◆Looking at results by source of demand, the manufacturing industries suffered a decline at -11.3% m/m for the first time in two months. Meanwhile, non-manufacturing orders (excluding shipbuilding and electric power) grew for the third consecutive month at +3.7% m/m.
◆According to the CAO outlook for the Jan-Mar 2015 period, private sector demand (excluding shipbuilding and electrical power) is expected to be up by +1.5% q/q, its third consecutive quarter of growth. This figure is considered to be achievable even if declines of as much as -2.4% m/m are suffered in February and March of the first quarter. 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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