Local manufacturing activity remained in contraction in August for the 14th straight month, although the performance was better compared with July.

The latest Purchasing Managers’ Index (PMI) reading released on Friday (Sep 2) came in at 49.8, a 0.5 point increase from the reading of 49.3 in July, according to the Singapore Institute of Purchasing and Materials Management (SIPMM).

A reading above 50 means that the manufacturing economy is expanding, while a reading below 50 indicates contraction.

Higher new orders and new exports, as well as higher factory output and employment. helped the performance, noted SIPMM while both the manufacturing inventory and finished goods recorded a slower rate of expansion.

Readings for inventory and stocks of finished goods also continued to record expansion, although the rate of supplier deliveries slowed.

Similarly, imports recorded a slower rate of expansion albeit the index now recorded expansion readings for 16 months.

Manufacturing employment remained lacklustre and the index continued to post contraction readings since November 2014.

SIPMM also noted the order backlog index for overall manufacturing industry reverted to a marginal expansion after contracting for 2 months.

Manufacturing activity in the electronics sector reverted to a marginal expansion for the first time in 13 months with an improved PMI reading of 50.2, up 0.5 of a point from July.