Core machinery orders in Japan increased by 3.4% in November from the previous month, marking the second consecutive month of growth, according to the Cabinet Office’s report on Monday. Excluding ships and power equipment, which are considered key indicators of corporate capital investment, core machinery orders reached ¥899.6 billion ($5.77 billion).
This growth follows a 2.1% rise in October and surpassed the median forecast of a 0.4% decline, based on a survey by Jiji Press of 16 economic research institutes. In light of this performance, the Cabinet Office has upgraded its assessment of the order trend for the first time in eight months, noting that machinery orders are showing signs of recovery.
A detailed breakdown revealed that orders from manufacturers surged 6.0% to ¥462.9 billion, following a substantial 12.5% increase in October. Seven of the 17 manufacturing sectors surveyed saw growth, particularly in demand for dynamos from chemical producers and engines from shipbuilders. However, orders for boilers and turbines saw a noticeable decline in the pulp and paper sector.
Meanwhile, core orders from non-manufacturers rose 1.2% to ¥453.7 billion, rebounding from a 1.2% decline in the previous month. This growth was primarily driven by strong demand for computers from the information services and financial sectors, including insurance companies.
Overall, total machinery orders, including those from the public sector and foreign markets, fell 14.4% to ¥2,981.7 billion, following a sharp 21.1% increase the previous month.
Takeshi Minami, chief economist at the Norinchukin Research Institute, commented that capital investment-related indicators are showing improvement. However, he also suggested that exporters might be holding back on placing orders due to uncertainties surrounding U.S. President Donald Trump’s tariff policy following his inauguration.