Global| Jan 13 2011Japan Machinery Orders Disappoint
Summary
Japan's machinery orders fell by 8.3% in November as core order slipped by 3% falling for the third month in a row. Domestic orders continued to be very erratic and are weaker at only half the growth for foreign orders over the past [...]
Japan's machinery orders fell by 8.3% in November as core order slipped by 3% falling for the third month in a row.
Domestic orders continued to be very erratic and are weaker at only half the growth for foreign orders over the past 12 months.
Still domestic orders have improved from a Yr/Yr drop of 14.8% over the previous 12 months to a rise of 11.2% over the most
recent 12 months. Foreign-based machine tool orders are up by 25% in the just completed 12-months.
Japan's economy is still in a disordered state. In the region China is slowing and fighting inflation; S. Korea has just hiked rates to contain overheating. Australia is suffering massive flooding. The region is under an assortment of stresses. Japan is most dependent on exporting to China and to the US. The US economy has not succeeded in switching into a high gear in its recovery; China, having grown strongly for a long period is trying to deal with its excesses.
Meanwhile Japan is left with weak growth in its two main export markets and has a load of debt hindering its ability to maneuver plus domestic political instability. It is still having a hard time getting its economy on track after more than a decade of woe. The orders numbers show us that there is some progress being made but they also demonstrate that it has not been strong enough to boost growth in core orders to consistency.
| Japan Machinery Orders | |||||||
|---|---|---|---|---|---|---|---|
| M/M % | SAAR % | ||||||
| SA | Nov-10 | Oct-10 | Sep-10 | 3Mo | 6Mo | 12Mo | 12Mo Ago |
| Total | -8.3% | 6.6% | -9.2% | -38.0% | 26.3% | 16.8% | -8.7% |
| Core Orders* | -3.0% | -1.4% | -10.3% | -46.0% | 8.9% | 11.9% | -20.0% |
| Total Orders | |||||||
| Foreign Demand | -17.8% | 16.0% | 6.9% | 8.1% | 6.4% | 25.0% | 1.6% |
| Domestic demand | -5.8% | 1.3% | -20.4% | -66.6% | 25.0% | 11.2% | -14.8% |
| * Excl ships and electric power | |||||||
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
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