First drop below 140 billion yen in four months, but still remains high

Japan Machine Tool Builders’ Association (JMTBA) announced the confirmed figures of Japan’s machine tool orders for December 2021. The total amount of orders received was 139.2 billion yen, up 40.6% from the same month last year. Although the total amount of orders fell below 140 billion yen for the first time in four months, orders still continue to be at a high level.

Domestic demand rose 2.4% month-on-month (MoM) to 51.2 billion yen, exceeding 50 billion yen for the fourth consecutive month. Of the all 11 industries, five saw MoM increases, including automobiles and aviation, shipbuilding and transportation machinery. By industry, the recovery trend is continuing in a wide range of industries, especially in semiconductor-related industries.

Foreign demand was up 31.0% year-on-year (YoY) and down 7.7% MoM to 88 billion yen. Orders in Asia, Europe, and North America all declined from the previous month, falling below 90 billion yen for the first time in three months, but still remain at a high level. By region, orders in East Asia exceeded 40 billion yen for the third consecutive month, as a rebound from large orders in South Korea and Taiwan was almost offset by an increase in China. On the other hand, India and Thailand saw MoM decreases. Orders in Europe remained strong. North America also remains at a high level.

As a result, the total amount of orders received in 2021 increased for the first time in three years, rising 70.9% YoY to 1,541.4 billion yen. This is the first time in three years that the amount of orders received exceeded 1.5 trillion yen and the fourth highest on record.