Japan Machinery Orders Fall For A Second Month in July

One important barometer of corporate capital spending fell for the second consecutive month in July, suggesting that manufacturers are bracing themselves for slower demand in the coming months. The Cabinet Office said Thursday core private-sector machinery orders, excluding the often volatile orders from electric power companies and for ships, fell 3.9 percent to 1.04 trillion yen ($9.67 billion) in July from June.



The decline, which was lead by a fall in demand from chemical and oil-product makers, follows a 2.6 percent decline in June and a 10.4 percent jump in May. Compared with July 2007 core orders fell 4.7 percent year on year. The figures, which are significant indicator of business investor sentiment over the next three to six months (both at home and overseas) is yet another bad sign for the Japanese economy.

Demand from the all important overseas sector was down 14.4% on June, which again is not a positive sign for forthcoming exports, or for Q3 GDP, which looks like it may well be heading for a second quarterly contraction.