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Japan Machinery Orders Up 3 Per cent in May

Source: AFP

Japan’s core private-sector machinery orders, a leading indicator of corporate capital spending, rose 3.0 per cent in May from the previous month, official data showed on Thursday.

The core data, which exclude volatile demand from power companies and for ships, reversed a 3.3-per cent drop registered for April, figures from the Cabinet Office showed.

Economists’ median forecast was a 2.6-per cent rise, according to Dow Jones Newswires.

The numbers appear to show that companies are now more willing to invest in plant and equipment, while orders related to post-quake reconstruction are also expected to show continued strength.

Orders from the public sector jumped 10.7 per cent in a turnaround from a drop of 1.2 per cent in April.

Japan has been pushing ahead with reconstruction after the March earthquake and tsunami. Parliament in early-May passed an emergency JPY4-trillion (US$49-billion) relief budget to help fund the reconstruction.

By sector, orders from manufacturers of information and communication electronics equipment rose 28.4 per cent. Orders from makers of automobiles, parts and accessories rose 2.9 per cent.

Machinery orders from construction companies rose 41.5 per cent, while orders from wholesale and retail firms climbed 35.8 per cent.