MT orders in H1 2022, second-highest level on record

The Japan Machine Tool Builders’ Association (JMTBA) announced an overview of machine tool orders in Japan for the first half of 2022 (January-June). The total amount of orders received during the period from January to June was 911.2 billion yen. Compared to the previous quarter, orders increased 8.6%, the consecutive increase for four quarters, and compared to the same period last year, orders increased 29.8%, the consecutive increase for three quarters. This is the first time in four years that orders have exceeded 900 billion yen in the first half of the year, as well as the first time in eight quarterly periods, including the second half of the year, making it the second highest ever on record.

Monthly orders received were strong both from Japan and overseas, with orders exceeding 150 billion yen for four consecutive months from March to June. Despite risk factors such as the Ukraine issue, the lockdown in China, shortages of components, rising prices of raw materials, and the ongoing yen depreciation, etc., the demand for made-in-Japan machine tools maintained a high level due to the increasing demand for automation against the background of supply chain restructuring, labor and energy saving in many countries.

Domestic demand increased 5.2% from the previous quarter and 48.9% from the same period last year to 314.5 billion yen, marking the fourth consecutive quarter-on-quarter (QoQ) increase and the third consecutive year-on-year (YoY) increase in a row. This was the first time in four years that domestic demand exceeded 300 billion yen in the first half of the year, and the first time in seven quarterly periods.

By monthly basis, domestic orders were below 50 billion yen at the beginning of the year due to waiting for subsidies, but reached 60.2 billion yen in March. Since then, orders have been around 50 billion yen and remain at a firm level.

By industry, only 6 of the 11 industries experienced QoQ increases, while 10 industries recorded YoY increases. In particular, the Electrical & Precision sector, which recorded 48.1 billion yen due to increased demand related to semiconductors, had the second-highest order volume on record, following the 50.4 billion yen recorded in the second half of 1990.

Foreign demand increased 10.4% QoQ and 21.6% YoY to a new record high of 596.6 billion yen. This was the fourth consecutive quarter in which both the QoQ and YoY demand increased, and the second consecutive quarter in which foreign demand exceeded 500 billion yen.

By monthly basis, monthly orders for all months from January to June exceeded 90 billion yen, and those for March to May exceeded 100 billion yen, marking a record-high level.

By region, Europe declined from the previous quarter due to the Ukraine issue, but all three major regions (Europe, Asia, and North America) increased YoY. Especially for Asia and North America, orders hit record highs. In China, while orders related to Electronics Manufacturing Service were limited, demand related to semiconductors and EVs remained firm. Also, large orders related to semiconductors were seen from South Korea and Taiwan. In the US, US domestic demand was boosted by supply chain reviews combined with the yen’s depreciation, and there was also increased demand in the automotive industry, mainly due to EV-related investments. In Europe, where orders declined from the previous quarter, there were large cancellations for Russia, which depressed the total amount of orders, but demand remained firm, driven mainly by the major EU countries.