Japan’s 2024 Machine Tool Orders Summary

Takeaway: 

• ・Japan’s total machine tool orders remained close to 2023 levels (-0.1% YoY). 
• ・Domestic orders declined (-7.4% YoY), dragged down by expected rebounds in semiconductor and EV-related investment that failed to materialize. 
• ・Foreign orders increased (+3.4% YoY), reaching the third highest level on record. China rebounded, North America remained solid, but Europe weakened significantly. 

Total orders: JPY 1,485.1 bln (-0.1% YoY) 

The Japan Machine Tool Builders’ Association (JMTBA) released the 2024 machine tool order results, showing a total order value of JPY 1,485.1 billion, a slight decrease of 0.1% year-on-year (YoY). While this was the second consecutive year below JPY 1.5 trillion, it was still the eighth highest total on record. 

Domestic demand struggled amid a prolonged market adjustment, as expected recoveries in semiconductor and automotive-related investment failed to materialize. In contrast, foreign demand remained stable, with China showing signs of recovery and North America maintaining steady orders, ultimately keeping total orders close to the previous year’s level. 

Orders for NC machine tools totaled JPY 1,461.6 billion (-0.1% YoY), accounting for 98.4% of total machine tool orders, exceeding 98% for the ninth consecutive year. The proportion of foreign orders exceeded 70% for the first time, increasing 2.4 percentage points to 70.3%. 

Domestic orders: JPY 441.5 bln (-7.4% YoY) 

Domestic orders declined for the second consecutive year, falling 7.4% YoY to JPY 441.5 billion. This was the second consecutive year that orders fell below JPY 500 billion and the first time in four years that orders fell below JPY 450 billion. 

Hopes for a recovery in electric vehicle (EV) and semiconductor-related investment did not materialize, extending the adjustment phase that began in the second half of 2023 through 2024. 

Industry breakdown (JPY million, YoY %): 

• ・General Machinery: JPY 181,041 (-11.1%)
      Including molds: JPY 15,761 (-44.1%)  
• ・Automotive: JPY 91,025 (-9.5%)
      Including auto parts: JPY 62,400 (-15.1%) 
• ・Electrical & Precision Machinery: JPY 54,733 (-5.1%) 
• ・Aircraft, Shipbuilding & Transportation Machinery: JPY 24,218 (+20.1%) 

Among the four major industries, only Aircraft, Shipbuilding & Transportation Machinery posted growth. Industrial Machinery and Automotive posted results below JPY 200 billion and JPY 100 billion, respectively, for the first time in four years. Other industries also struggled, with double-digit declines in Other Manufacturing (-17.8% YoY, JPY 18.8 billion) and Electrical Machinery (-13.1% YoY, JPY 31.5 billion). 

Foreign orders: JPY 1,043.6 bln (+3.4% YoY) 

Foreign orders increased for the first time in two years, rising 3.4% YoY to JPY 1,043.6 billion. This was the fourth consecutive year that foreign orders exceeded JPY 1 trillion, the third highest level on record. 

Despite a weakening European market, China’s recovery and steady demand in North America kept foreign orders at a monthly average of JPY 87 billion. 

Regional breakdown (JPY million, YoY%): 

• ・Asia: JPY 517,216 billion (+21.0%)
      East Asia: JPY 389,485 billion (+21.8%)
      Other Asia: JPY 127,731 billion (+18.5%) 
• ・Europe: JPY 188,865 billion (-19.1%) 
• ・North America: JPY 306,242 billion (-4.5%) 

Asia: JPY 517.2 billion (+21.0%) 

Asia saw a significant recovery, surpassing JPY 500 billion for the first time in two years and recording the fourth highest total in history. 

Key markets: 

• ・China: JPY 337.1 billion (+23.0%) 
• ・South Korea: JPY 29.6 billion (+18.3%) 
• ・Taiwan: JPY 22.3 billion (+10.2%) 
• ・India: JPY 64.2 billion (+25.6%) 

China’s recovery was driven by government subsidies, which addressed economic concerns following the real estate downturn. The EV and IT sectors continued to contribute to high order volumes, making it the fourth largest annual order volume for China on record. 

India remained a key growth driver, reaching a record total for the second consecutive year as IT-related investment expanded in the second half of the year. Vietnam also saw an increase in IT-related investment, pushing total orders for “Other Asia” above JPY 120 billion for the first time in six years. 

Europe: JPY 188.9 billion (-19.1% YoY) 

Europe experienced a sharp decline, with total orders falling 19.1% YoY to JPY 188.9 billion. Every European market recorded a decline as geopolitical risks, energy challenges and rising interest rates took their toll. 

Key markets: 

• ・EU total: JPY 140.4 billion (-17.4%)
      Germany: JPY 41.4 billion (-26.8%)
      Italy: JPY 24.0 billion (-27.0%) 
• ・Switzerland: JPY 6.4 billion (-57.0%) 
• ・Eastern Europe: JPY 1.3 billion (-39.3%) 

Germany and Italy saw declines of more than 20% YoY, while Switzerland and Eastern Europe saw even steeper declines. 

 North America: JPY 306.2 billion (-4.5% YoY) 

North America declined for the second consecutive year, falling 4.5% YoY to JPY 306.2 billion. However, it remained above JPY 300 billion for the third consecutive year, the fourth highest level on record. 

Key markets: 

• ・United States: JPY 267.3 billion (-5.2%) 
• ・Canada: JPY 19.3 billion (-3.0%) 
• ・Mexico: JPY 19.7 billion (+5.3%) 

The U.S. automotive sector remained weak, but Industrial Machinery and Electrical & Precision Machinery provided some stability. The Aircraft, Shipbuilding & Transportation Machinery sector saw large orders from the aerospace industry, making it the second largest category for U.S. orders. 

Canada posted its first decline in four years, but remained at its second highest level on record. Mexico expanded for the fourth consecutive year, with orders increasing in all major sectors except Industrial Machinery.