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*August core orders disappoint, below forecast
* Manufacturer orders drop 13.4%, biggest drop since 2016
* Manufacturers mood at 6-month low – Businesshala Tankan
Kantaro Komiya. By
TOKYO, Oct 13 (Businesshala) – Japan’s main machinery orders fell unexpectedly in August, underscoring continued pressure on businesses and the broader economy as companies struggle to overcome the drag from the coronavirus pandemic.
Cabinet Office data on Wednesday showed Key Orders, a highly volatile data series that is regarded as an indicator of capital expenditure over the coming six to nine months, fell 2.4% in August from the previous month.
contraction compared with July’s 0.9% increase. A Businesshala poll of economists had predicted a growth of 1.7%.
For the first time in six months, the government on Wednesday downgraded its assessment on machinery orders, saying the recovery in the chain was stalling.
The data comes nearly a week after the inauguration of new prime minister Fumio Kishida, when his predecessor Yoshihide Suga saw him undercut his support by increasing COVID-19 infections and lengthy restrictions.
While Japanese firms have driven the economy’s recovery through solid production, exports and capital expenditure so far, the outlook points to a bumpy ride.
A permanent supply crunch and rising material costs pushed manufacturers’ sentiment to a six-month low in October, Businesshala Tankan showed on Wednesday.
After a 1.9% year-on-year gross-domestic product (GDP) growth in the second quarter, analysts forecast a small gain in Japan’s July-September GDP, which is sluggish – if not shrinking – by private consumption. .
By sector, orders from manufacturers fell 13.4% month-on-month in August, the first decline in five months, pulled down by weak demand from sectors such as electronic machines, production machines and shipmakers. According to a government official, this is the biggest shortfall since February 2016.
Orders from non-manufacturers grew 7.1% after a 9.5% drop in July due to demand from wholesalers and retailers and transportation companies.
Outstation orders, which are not counted as main orders, fell 14.7% after a 24.1% increase in the previous month.
Compared to a year ago, core orders, which exclude those for ships and power utilities, expanded 17.0% in August, data showed, marking a double-digit decline in the same month in 2020. . Economists polled by Businesshala had predicted 14.7%. jump. (Reporting by Kantaro Komiya; Editing by Richard Pullin)