August MT preliminary report, both domestic and foreign demand down MoM

Japan Machine Tool Builders’ Association (JMTBA) announced preliminary machine tool orders for August 2022. The total amount of orders received was 139.3 billion yen, slightly below 140 billion yen for the first time in six months. This was the second-lowest order amount in 2022 after February’s 139.0 billion yen, but the absolute value of orders is still at a stable level. The month-on-month (MoM) orders were down 2.1% for the second consecutive month, while the year-on-year (YoY) orders were up 10.7% for the 22nd consecutive month of YoY growth. This was also the 19th consecutive month in which the amount of orders exceeded 100 billion yen.

Domestic demand decreased 0.3% from the previous month to 51.8 billion yen, marking the second consecutive MoM decline yet the third consecutive month in which domestic demand exceeded 50 billion yen. Although a reduction was forecast due to the spread of COVID-19 infection and the summer breaks in Japan, there was only a minor MoM drop, partly supported by the subsidies.

Foreign demand fell 3.2% from the previous month to 87.5 billion yen, marking the third consecutive MoM decline. This was the first time in eight months that foreign demand fell below 90.0 billion yen, but it maintained a YoY increase for the 22nd consecutive month. Although there are some who point to a slowdown in orders in parts of Europe and the U.S. due to economic unpredictability and so on, orders remain at a high level, and demand can be considered to be steady.