Japan Machine Tool Orders Decline in January 2025 Despite Year-on-Year Growth

The Japan Machine Tool Builders’ Association (JMTBA) has reported that total machine tool orders in January 2025 reached 116.15 billion yen (approximately £595 million), reflecting an 18.8% decline from December 2024. This marks the first month-on-month dip in two months, driven by a simultaneous drop in both domestic and foreign demand.

However, on a year-on-year basis, January’s figures present a more positive outlook, with a 4.7% increase compared to January 2024, continuing a trend of four consecutive months of year-on-year growth.

Despite falling below the 120 billion yen threshold for the first time in two months, JMTBA noted the results were still broadly consistent with the same period last year. The association added: “While orders received in January were roughly the same as last year, there were differences in the order-receiving industries and countries/regions, making the situation patchy. We will need to keep a close eye on the future situation.”

Domestic Market Weakens

Domestic orders dropped 19.9% month-on-month, settling at 32 billion yen. Still, this figure represented a 4.6% year-on-year increase. Sector-wise comparisons with December reveal steep declines:

• Industrial machinery: down 21.4%
• Motor vehicles: down 30.9%
• Electrical and precision machinery: down 10.7%
• Aircraft, shipbuilding, and transport equipment: down 29.8%

Foreign Orders Follow Similar Trend

Overseas demand also declined, with foreign orders falling 18.4% from December to 84.15 billion yen. Nonetheless, this marks a 4.7% increase from January 2024, continuing a four-month streak of year-on-year growth.

Regional Breakdown:

• Asia: Orders fell 12.7% from December to 44.80 billion yen, but rose 21.7% year-on-year
• Europe: Down 19.2% month-on-month to 13.22 billion yen, a 21.0% drop year-on-year
• North America: Orders decreased 24.5% from December to 24.16 billion yen, a 0.7% decline year-on-year

As global economic uncertainties and regional fluctuations impact capital spending, the JMTBA is expected to continue monitoring the market closely in the months ahead.