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Machinery orders down 7.6% in September; Credit Suisse warns of recession

November 13, 2007
By Ken Worsley


It’s still hard to come by good news on Japan’s economy. Last week the Cabinet Office announced that Japan’s September machinery orders fell by 7.6% - quite a bit more than expected. Bloomberg’s survey of 41 economists had predicted a 1.5% fall.

The question is whether this will lead to a slowdown in capital investment, which would certainly not be helpful for GDP figures. We are assuming capital spending to be flat as a contributor in the July-September GDP statistics, and another month of lower machinery orders may help drive it into negative territory, along with the huge dropoff in housing construction. Coupled with fears that exports may slow - especially to the US, where September’s figures were the lowest in four years - and sluggish domestic demand, we’re starting to take Credit Suisse seriously when it says that there is a 40-50% chance of a recession for the Japanese economy:

Shirakawa of Credit Suisse says there is a 40-50 percent chance of a recession in Japan. He said companies are facing risks including the stronger yen, continued fallout from the collapse of the U.S. subprime mortgage market, the possibility of a slowdown in China, faltering demand at home exacerbated by a housing slump, and rising energy prices.

Filed Under Economic Reports, Economics, GDP 

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One Response to “Machinery orders down 7.6% in September; Credit Suisse warns of recession”

  1. www.topcreditcardsadvice.info » Machinery orders down 7.6% in September; Credit Suisse warns of … on November 13th, 2007 2:39 pm

    […] Ken Worsley created an interesting post today on Machinery orders down 7.6% in September; Credit Suisse warns of ….Here’s a short outline:Coupled with fears that exports may slow - especially to the US, where September’s figures were the lowest in four years - and sluggish domestic demand, we’re starting to take Credit Suisse seriously when it says that there is a 40-50% … […]

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