Foreign demand drove recovery, Japan February machine tool orders increased month-on-month

On March 23, 2021, Japan Machine Tool Builders’ Association (JMTBA) announced the amount of Japan machine tool orders in February. The amount of orders increased by 19.1% month-on-month to 105.5 billion yen, the first increase in two months. Domestic demand increased 15.4% month-on-month to 30.4 billion yen, and foreign orders increased 20.7% month-on-month to 75.1 billion yen.

Domestic demand will continue to recover moderately due to the effects of the issuance of a state of emergency for COVID-19. Recovery is delayed in major industries such as general machinery and automobiles.

Foreign orders exceeded 75 billion yen for the first time in 23 months since March 2019. By region, orders from Asia exceeded 40 billion yen for the first time in two months, and orders from China exceeded 30 billion yen for the first time in 34 months. The orders for electrical machinery, machinery and automobiles continue to expand.

JMTBA also announced the amount of Japan’s machine tool orders in 2020. Orders received in 2020 decreased for the second consecutive year to 901.8 billion yen, down 26.7% from the previous year. Factors such as the US-China trade friction and the spread of COVID-19 overlapped with the recession of machine tool demand. As a result, demand for machine tools decreased both in Japan and overseas, and orders received in 2020 fell below 1 trillion yen for the first time in 10 years.