Japan's machinery orders post biggest drop in decade
Tuesday, 11 November 2008
TOKYO, Nov 10 (AFP): Japan's core machinery orders plunged at the fastest pace in a decade in the three months to September as the economy teetered on the verge of recession, official data showed today.
The core private-sector orders, a leading indicator of corporate capital spending, tumbled 10.4 per cent from the previous quarter, the first quarterly drop in more than a year, the Cabinet Office said.
The slump matched a 10.4 per cent drop seen in the second quarter of 1998, which was the steepest fall since comparable records began 21 years ago.
The core orders, which exclude particularly volatile demand from power companies and for ships, are expected to edge up 1.2 per cent in the fourth quarter of 2008, according to the manufacturers' own forecasts.
The Japanese economy, the second largest in the world, shrank in the second quarter of this year and a slew of gloomy data since then have reinforced fears of a prolonged downturn.
Many analysts expect figures due next week to show the Japanese economy shrank for a second straight quarter in the three months to September, meeting the most common definition of a recession.
Japan's corporate sector has been a key driver of a recovery in Asia's largest economy following the recessions of the 1990s.
But companies are now cutting back their investment in new plant and equipment in response to the global financial crisis.
The core private-sector orders, a leading indicator of corporate capital spending, tumbled 10.4 per cent from the previous quarter, the first quarterly drop in more than a year, the Cabinet Office said.
The slump matched a 10.4 per cent drop seen in the second quarter of 1998, which was the steepest fall since comparable records began 21 years ago.
The core orders, which exclude particularly volatile demand from power companies and for ships, are expected to edge up 1.2 per cent in the fourth quarter of 2008, according to the manufacturers' own forecasts.
The Japanese economy, the second largest in the world, shrank in the second quarter of this year and a slew of gloomy data since then have reinforced fears of a prolonged downturn.
Many analysts expect figures due next week to show the Japanese economy shrank for a second straight quarter in the three months to September, meeting the most common definition of a recession.
Japan's corporate sector has been a key driver of a recovery in Asia's largest economy following the recessions of the 1990s.
But companies are now cutting back their investment in new plant and equipment in response to the global financial crisis.