Japan forklift sales: further signs of export stabilisation

by SR on November 26, 2012

Japan forklift exports, cumulative year-to-date (thousand units)

China PMI, Japan forklifts looking better

The Japan Industrial Vehicles Association (JIVA) reported forklift sales and exports for October 2012 earlier today. Domestic sales rose 5.1% year-on-year and fell 9.1% month-on-month to 5,860 units, while exports came in at 4,066 units, down 7.7% YoY but falling only 4.8% month-on-month – the fourth-strongest performance for October of the past 20 years. Cumulative exports from January to October 2012 have fallen 11.4% relative to the same January to October period in 2011. That may not sound very exciting, but that figure of 11.4% has essentially been unchanged for 3 consecutive months. Look at the chart above and see how the red line (exports in 2012) has run parallel to the blue line (exports last year) for the past few months. The gap isn’t closing, but neither is it widening further.

Moreover, these exports would have been placed in the summer, before the recent improvement in sentiment. So, orders for forklifts today may be rather better than they were back in July or August and that could mean higher sales in future.

Having said that, I am not overly fond of forklift stocks, as there are few pure plays about (neither Toyota Industries nor Komatsu depend primarily on forklifts) and in any case I think you should be looking at something more obvious and less ‘clever’ at this point. Something like Komatsu, which would benefit both a resurgence in US construction and a recovery in China.

On the subject of China, the HSBC China Manufacturing PMI™ for November 2012 that came out at the end of last week was also interesting. HSBC’s write-up makes in clear that orders are still weak, but overall the PMI is picking up quite nicely, as shown below. November is a preliminary figure, but the gap between the ‘flash’ and the final figure is usually very small.

HSBC China Manufacturing PMI (monthly)

Meanwhile, Japan’s machinery stocks have generally had a good month so far in November 2012 (see below). Komatsu, which would be my pick, is up 12.1%, handily beating TOPIX but not quite as impressive as the +23.4% increase posted by Sumitomo Heavy Industries. Mind you, even after the past month, SHI is still down 21.4% year-to-date in 2012 while Komatsu has risen 4.2%, so I’d say that there’s an element of people buying laggards in SHI’s performance month-to-date.

Japan machinery stocks, change in share price month-to-date (%)

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