Machinery orders fall more than 9 per cent

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Thursday, 8th July 2010
In Business In Japan,

Machinery orders fall more than 9 per cent

Machinery orders in Japan fell by 9.1 per cent during May, cabinet office figures from the country have shown.

Such product orders are seen as an important indicator of the state of the economy and business confidence, as well as a barometer of business investment, so a sharp fall could spell bad news for the nation's economy.

The drop of more than nine per cent seen during May is the largest decline in orders seen since August 2008 and has caused concern that the Japanese economic recovery could be stalling.

Recently, the nation recently emerged from its worst recession since the end of the second world war.

The drop is much higher than the 2.5 per cent fall predicted by some economists and commenting on the new figures, economist at Daiwa Institute of Research Hiroshi Watanabe said the numbers are "poor".

"The figure means companies are becoming cautious about making new investments due to growing uncertainty over an economic recovery," he said.

Written by Mark Smith.