Japan's May Machinery Order Increases at 4 Months

Japan’s machinery orders rose by 3% month-on-month in May this year, the fastest increase in four months. The results are in line with expectations, indicating that companies are increasing their spending to resume production, and post-disaster reconstruction plans are stimulating machinery demand.

Japanese companies expect that profits will resume later in 2011 and are increasing spending plans. Each manufacturer is resuming production facilities and the Japanese government is carrying out stimulus measures for post-disaster reconstruction. The world's second largest construction machinery manufacturer Komatsu Ltd. It said that Japan’s reconstruction plan is stimulating construction demand.

Some Japanese machinery analysts also said that at present, Japanese companies are willing to spend their money on factories and equipment that are hardly hit by the earthquake. With the support of reconstruction requirements, the number of mechanical orders in the future may increase.

Efforts to rebuild the affected area are driving up demand for excavators and wheel loaders. Ko鄄matsu’s chief executive stated that during the April-June quarter, orders for some construction machinery in Japan grew by more than 30% year-on-year.