TOKYO, Jan. 18 (Xinhua) -- Japan's core private-sector machinery orders dropped more than expected in November from a month earlier, the government said in a report on Wednesday.
According to the Cabinet Office, the orders, excluding those for ships and utilities because of their volatility, fell 8.3 percent in November from the previous month, marking the first decline in two months, following a 5.5 percent increase logged in October.
November's reading compared to median economists' expectations for a 0.9 percent decline in the recording period.
The drop in core orders led to the Cabinet Office downgrading its assessment of the orders for the first time since September, viewing them as "stalling" compared to its previous views that orders are "showing signs of stalling in their recovery."
Orders from manufacturers fell 9.3 percent, the Cabinet Office said, marking a third straight month of decline, with orders from electric machinery sectors seeing a notable downturn in the recording period.
Those from non-manufacturers, excluding ships and electric utilities, declined 3.0 percent, following October's 14 percent jump, the Cabinet Office's data also showed.
Machinery orders are a key advance indicator for corporate capital spending and the government uses the data to predict the strength of business spending in a six to nine month period ahead.
A rise in capital expenditure can boost the economy as Japanese companies are producing more machinery to meet rising demands from overseas markets.
A drop, however, as was the case in the recording period here, has the opposite effect and weighs on the economy and can see production tapered or significantly reduced.
Such business investment accounts for roughly 15 percent of Japan's gross domestic product.
Types of machinery included in the monthly government survey comprise engines and turbines, heavy electrical machinery, electronic and communication equipment, industrial machinery, machine tools, railway rolling stock, road vehicles, aircraft, ships, water crafts, as well as sub types in those categories. ■