Manufacturing activity in Singapore shrank for the sixth consecutive month in February, as demand for made-in-Singapore goods as well was employment levels slowed, amid an uncertain economic and trade environment at home and abroad.
The Purchasing Managers’ Index (PMI) for February came in at 50.4, down 0.3 point from the previous month. This is the lowest reading since December 2016, according to numbers published by the Singapore Institute of Purchasing and Materials Management (SIPMM) on Monday (Mar 4).
A PMI reading above 50 indicates that the manufacturing economy is generally expanding, while a reading below 50 indicates that it is generally declining.
The electronics sector contracted for the fourth consecutive month, dipping 0.1 point to 49.5 last month.
This was due to a second-time contraction in new orders, new exports and employment, as well as a third-time contraction in factory output, said SIPMM. The weaker reading was cushioned by the inventory index, which recorded a higher rate of expansion.
“This was not unexpected as global/regional manufacturing PMIs remained softer to stable in February, pending the highly anticipated US-China trade deal, as well as due to the Chinese New Year holidays in early February,” said Ms Selena Ling, head of treasury research & strategy at OCBC Bank.
“Note that for the electronics sector, the last contraction streak had lasted for 13 consecutive months from July 2015, excluding the sporadic contraction warning signals in the first half of 2015.”
Ms Ling added that regional manufacturing and trade activities may remain lacklustre, barring a quick resolution to the US-China trade war.
Singapore’s factories have had a stuttering start to the year. Industrial production declined 3.1 per cent in January from a year ago – its first negative print since December 2017, and the worst year-on-year performance since July 2016.
Source: Channel NewsAsia