March 2024 Machinery Orders

◆According to statistics for machinery orders in March 2024, private-sector orders (excluding ships and electric power) grew for the second consecutive month by +2.9% m/m. While non-manufacturing orders (excluding ships and electric power) declined, manufacturing orders achieved significant growth due to large projects (exceeding 10 bil yen) and other factors. The Cabinet Office revised its assessment for machinery orders upwards to “showing signs of picking up.”

◆Manufacturing orders grew for the second consecutive month. Ship building, which took in some large projects, brought overall performance up, and orders grew for other industries as well, including general-purpose and production machinery, and other transport equipment. Meanwhile, non-manufacturing orders (excluding ships and electric power) declined for the first time in three months. The main cause was other non-manufacturing, which experienced a reactionary decline in response to a large project during the previous month, pulling overall performance down.

◆As for the future of private sector demand (excluding ships and electric power), performance is expected to continue marking time. Corporations are expected to be active in labor saving investment and other areas of investment with the appetite for capex spending remaining strong. On the other hand, caution is recommended as capex could hit a low due to the slowdown in overseas economies and other factors.