Japan’s core machinery orders tumbled in September, a decline that companies expect to continue into October-December in a sign that business investment is losing momentum.
The 8.1 percent fall in machinery orders was more than the median estimate for a 1.8 percent decline and follows a 3.4 percent increase in the previous month.
Prime Minister Shinzo Abe has made increasing capital expenditure a priority in his economic agenda, but machinery orders suggest the task could more difficult than some policy makers expect.
Orders from manufacturers fell 5.1 percent month-on-month in September, driven by lower orders for cranes and other heavy machinery used in construction.
Service-sector orders fell 11.1 percent, led by falling orders for trains, and computers and servers used in finance and insurance, Cabinet Office data showed on Thursday.
Companies surveyed by the Cabinet Office expect core orders to fall 3.5 percent in October-December after a 4.7 percent rise in the previous quarter.
Compared with a year earlier, the core orders, which exclude those for ships and utilities’ electrical power equipment, fell 3.5 percent in September, versus the median estimate for a 1.9 percent increase.
The government argues that capital expenditure is an important way to raise productivity and help Japan cope with a declining population.
However, the machinery orders data suggests that capital expenditure is slowing temporarily.