May MT preliminary report, falls below 120bn yen for first time in 27 months

The Japan Machine Tool Builders’ Association (JMTBA) announced the preliminary orders for machine tools for May 2023. The total amount of orders received was 119.3 billion yen. This was the second consecutive month in which total orders declined on a month-on-month (MoM) basis and the fifth consecutive month in which they declined on a year-on-year (YoY) basis. It was the first time in 27 months since February 2021 (105.6 billion yen) that total orders fell below 120 billion yen. This is the 28th consecutive month that orders have exceeded 100 billion yen.

Domestic demand fell 9.9% from the previous month to 37.5 billion yen. This was the second consecutive month of MoM decline and the ninth consecutive month of YoY decline. It was the first time in three months that domestic demand fell below 40.0 billion yen. This was partly due to a decrease in operating days due to the long holiday weekend in early May, and partly due to a reactionary decline from the previous month’s subsidy effect.

Foreign demand decreased 10.2% MoM to 81.7 billion yen. This was the second consecutive month of MoM decline and the fifth consecutive month of YoY decline, falling below 85.0 billion yen for the first time in 21 months since August 2021 (81.3 billion yen). While large orders supported foreign demand in March and April, the absence of large orders this month is likely to have had an impact.

The level of new orders in May was a step down from recent months. Details will be available at the time of the final report.