The nation's core private-sector machinery orders showed solid growth in September, but the outlook for business investment remained unclear as orders are expected to drop over the next three months, the government said Monday.

The key early gauge of capital spending rose a seasonally adjusted 12.7 percent in September to 865.3 billion yen after declining 13.6 percent in August, the Cabinet Office's Economic and Social Research Institute said.

The figure represents an unadjusted 2.7 percent drop from a year earlier.

The office forecast that core machinery orders in October-December would fall 6.5 percent after a 1.7 percent decline in the July-September period and a 7.1 percent rise in April-June.

Yoshihiko Senoo of the institute's Business Statistics Department said the office is leaving its assessment of machinery orders unchanged, which means it is showing signs of bottoming out. The developments should be observed carefully, he said.

"Machinery orders are moving in a boxed range," he said. "The possibility of a further downward revision cannot be ruled out, given the severe outlook by companies."

Private-sector machinery orders are considered a leading indicator of corporate capital spending six to nine months ahead.

The core private-sector orders exclude those for ships and from electric power companies, which tend to be volatile because of their huge size.

In September, orders from manufacturers rose 11.4 percent to 315.4 billion yen, following a 17.2 percent drop to 283.2 billion yen in August, according to the office.

Core machinery orders from nonmanufacturers rose for the first time in three months, expanding 5.3 percent to 547.6 billion yen, it said.

Of the 17 surveyed manufacturing industries, orders rose in nine sectors, with those from the electrical machinery industry climbing 9.2 percent.

As for nonmanufacturers, machinery orders from the telecommunications sector rose 22.9 percent while those from financial institutions and insurance jumped 31.7 percent.