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TOKYO: Japan's core machinery orders, a leading indicator of corporate capital spending, fell to their lowest level on record in May after registering a surprise slump, official data showed Wednesday.
Core private-sector orders fell 3.0 per cent in May from the previous month to 668.2 billion yen (US$7 billion), the lowest level since officials started collecting comparable data in April 1987, the Cabinet Office said.
The average market forecast had been for a rise of 2.0 per cent after a fall of 5.4 per cent in April amid hopes that the worst of the global recession may be over.
The core orders, which exclude particularly volatile demand from power companies and for ships, are seen as a barometer of business investment.
Naoki Murakami, chief economist at Monex Securities, said the latest data threw cold water over expectations of a swift Japanese economic recovery.
"It reminds us of the risk that the pace of economic recovery may be very slow due to cutbacks on domestic capital spending by non-manufacturing and other companies," he said in a report.
Orders from manufacturing companies increased 5.4 per cent in May after a 9.4 per cent drop in April but those from non-manufacturers fell 6.9 per cent following an 8.8 per cent dip in April.
Orders for the three months to June are expected to fall 5.0 per cent from the previous quarter, following a drop of 9.9 per cent in January-March.
- AFP/yb
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