Japan’s core private-sector machinery orders fell a seasonally adjusted 1.4 percent in May from April for the second straight monthly decline, the government said Monday, downgrading its basic assessment of the orders amid sluggish business investment demand.
The orders, widely viewed as a leading indicator of future capital spending, totaled 785.0 billion yen ($7.8 billion), the Cabinet Office said. The decline followed an 11.0 percent drop in April.
The government downgraded its basic assessment of core machinery orders, saying they are now “at a standstill.” For April data, it said orders declined sharply though they had shown “signs of picking up.”
The figures are closely watched as Prime Minister Shinzo Abe’s government sees business investment, which accounts for some 15 percent of Japan’s gross domestic product, as a pillar of economic growth.
Orders from the manufacturing sector dropped 6.4 percent to 311.5 billion yen, while those from the nonmanufacturing sector fell 0.3 percent to 473.8 billion yen.