Japan's Machinery Orders Surge by 13% in March 2025 Due to Large Temporary Projects
Tokio (donderdag, 22 mei ‘25)
Japan’s machinery orders increased by 13% in March 2025 due to large projects, marking the highest increase since January 2008. However, this surge is attributed to temporary demand.
Record-Breaking Performance Details
The Cabinet Office reported that core machinery orders, excluding volatile orders for ships and power equipment, reached ¥1.0107 trillion in March 2025, exceeding market expectations significantly [1]. This remarkable increase came as a surprise to analysts who had predicted a -1.6 percent decline for the month [2]. The surge brought both the growth rate and order value to their highest levels since January 2008 [1].
Major Contributing Factors
The exceptional growth was driven by four major orders exceeding ¥10 billion each, including chemical machinery for plant equipment, two large marine internal combustion engines, and one telecommunications equipment order [1]. In the manufacturing sector, orders increased by 8.0% month-on-month, with strong demand from electrical machinery, general-purpose production machinery, and automotive sectors offsetting declines in non-ferrous metals, other manufacturing, and steel industries [1].
Quarterly Performance and Future Outlook
Looking at the broader picture, machinery orders for the first quarter of 2025 showed a 3.9% increase, marking the second consecutive quarter of growth [3]. However, the Cabinet Office maintains a cautious stance, keeping its assessment unchanged as showing ‘signs of picking up’ despite the dramatic March increase [1]. Forecasts for the April-June quarter suggest a -2.1 percent decline, which would mark the first decrease in three quarters [3].
Economic Implications
The non-manufacturing sector (excluding ships and power generation) demonstrated robust growth with a 9.6% increase in March [1]. However, external demand faced challenges, with overseas orders declining by 13.1% [1]. Notably, as of March 2025, there were no observable effects of U.S. tariff policies on order patterns, though officials indicate the need for careful monitoring of potential impacts in the coming months [3].