Japan's core machinery orders, a key gauge of corporate capital spending, fell by 4.4% in October, official figures showed Dec. 10, underscoring the rapidly worsening economy.
The decline in the orders, which matched market forecasts, followed a 5.5% rise in September and a 14.5% plunge in August. Compared with the previous year, the core machinery orders -- which exclude particularly volatile demand from power companies and for ships -- dropped 15.5% in October.
"Companies' appetite for investment is weak, which is likely to continue at least until the end of next year, when corporate profits may begin to recover," said Taro Saito, senior economist at the NLI Research Institute.
Orders from overseas plummeted 37.2%.
Japan's corporate sector has been a key driver of a recovery in Asia's largest economy following the recessions of the 1990s. But firms are now cutting back their investment in new plant and equipment in response to the financial crisis, raising fears that the recession will be deeper and longer than previously feared.
Machinery orders placed by the manufacturing sector in October fell 2.2%, led by sharp drops in the electrical machinery and auto sectors. Orders by non-manufacturers fell 2.3%, down for a fifth straight month.
Official figures on Nov. 9 showed that Japan's economy shrank an annualized 1.8% in the third quarter, much worse than initially thought, as it entered its first recession in seven years.
Copyright Agence France-Presse, 2008