Good morning everyone

Today we talk about a particular topic concerning machine tools (machinery leader in Makinate catalogue) and Japan. Japan is the country from where many important companies come from Very well known worldwide companies such as Takisawa, Matsuura, Okuma and many others.

So let’s talk about the relationship between the Japanese economy and the production of machine tools, analyzed by the Japan Machine Tools Builders’ Association (Jmtba).

First, you must define what is this Association and what it does.

Japan Machine Tools Builders’ Association

The JMTBA is a no-profit association that brings together manufacturers of machine tools. It was founded in 1951 but has been recognized as no-profit only in 1978.

The activities carried out by this institution are mainly surveys on the production, distribution and import-export of machine tools and all activities related to the industry for this type of machinery (taxation systems, financial systems, etc.).

Japan and the production of machine tools

Let’s go staright to the core of this article. Japan is a country with strong industrialization, during the period between the two World Wars the country experienced a significant growth of various industries including the production of machine tools.

We won’t go back so many decades, we now focus only on the last 5 years.

This five-year time saw the end of a long period of stagnation of the machine tools industry. From 2014-2015 it has been finally possible to register a constant output growth with positive results.

However, in the following 16 months there has been again a little contraction, until in December 2016 when it has been registered a resumption leaded by the increasing purchasing orders.

According to the latest report of Jmtba, orders for machine tools in Japan rose by a sharp 26.3% per annum, however slowing compared to 31.1% in June (24.4% in May).

We wonder why we use as an indicator of investment spending, orders for machine tools.

Machine Tool Orders Index measures the change in the orders of tools from manufacturers, producers and then designates the conditions of firms in Japan.

But above all machine tools orders indicates an expansion of the Japanese economy.

The graphic below shows the progress of orders of Japanes machine tools created by Investing.com (a main global financial site that provides tools and information related to the financial markets, as streaming real time quotes and charts, financial news update and much more.)

Here are the data about Japanese machine tools orders, monthly recorded. The data above zero, should be read as positive data that allowed a rise of the Yen, Japanese currency. The opposite occurs when data is below zero.

So you can easily see it a recovery of the Japanese economy when you are at the top of the chart, a decline when you are at the bottom.

If you enjoy reading this article, please let us know, we will write other similar articles, focusing on economies of other countries.