FY2023 Summary: Japan’s machine tool orders down 14.8% YoY

July 18, 2024

Total Orders: JPY 1,453.136 Billion (Down 14.8% YoY)

The Japan Machine Tool Builders’ Association (JMTBA) has released the summary of Japan’s machine tool orders for fiscal year 2023 (April 2023 – March 2024). The total amount of orders for 2023 was JPY 1,453 billion, a decrease of 14.8% compared to the previous year. This was the first decrease in three years, and the first time in three years that the total fell below JPY 1,500 billion. However, the total remained above JPY 1,400 billion for the third consecutive year, which was the ninth highest in history.

Monthly orders showed a gradual decline from the latter half of 2022 and continued into 2023, but remained resilient, with new orders never falling below JPY 110 billion per month throughout the fiscal year.

Domestic demand: JPY 457.521 Billion (Down 21.3% YoY)

Domestic orders decreased 21.3% year-on-year (YoY) to JPY 457 billion, marking the first decline in three years and falling below JPY 500 billion for the first time in three years. Monthly domestic orders exceeded JPY 40 billion in only four months, while they fell below JPY 35 billion in four months.

Nine out of 11 industry sectors showed a YoY decline. The semiconductor and automotive industries have remained sluggish. The sectors that showed growth were those gradually recovering from the COVID-19 pandemic, such as aircraft, shipbuilding and transportation machinery, as well as the public sector and educational institutions, which are less affected by economic fluctuations.

Foreign demand: JPY 995.615 Billion (Down 11.4% YoY)

Foreign demands decreased by 11.4% YoY to JPY 995 billion, marking the first decline in four years and falling below JPY 1,000 billion for the first time in three years. Nevertheless, the total amount of foreign orders reached the fifth-highest level in history.

Monthly orders from Europe and North America remained stable, while orders from Asia showed a subdued trend toward the middle of the fiscal year.

Regionally, India maintained strong performance throughout the year, while China experienced a slowdown at the beginning of the fiscal year due to economic uncertainties but showed a gradual recovery towards the end. As a result, total orders from Asia fell below JPY 500 billion for the first time in three years. In Europe, the level of orders dropped by one step since the beginning of 2024, but remained above JPY 200 billion for the third consecutive year. North America also saw concerns due to high-interest rates, but aerospace-related sectors performed strongly, keeping orders above JPY 300 billion for the third consecutive year, achieving the second-highest level in history.