Singapore: Manufacturing PMI continues to soften in January
February 5, 2019
The manufacturing PMI produced by the Singapore Institute of Purchasing and Materials Management (SIPMM) fell to 50.7 points in January from 51.1 points in December, the lowest reading since December 2016. The index, nevertheless, remained above the crucial 50-point mark that separates expansion from contraction in Singapore’s manufacturing sector.
The drop in the index was driven by a broad-based slowdown in index components. Expansions in new orders, new exports, employment and factory output all lost momentum in January. Moreover, backlogs of orders continued to contract.
Meanwhile, the electronics PMI ticked down to 49.6 in January from 49.8 in December, the weakest reading since June 2016. There was a synchronized slowdown in Asia’s factory activity last month as Indonesia, Taiwan, South Korea and Japan all recorded softer readings. The U.S.-Sino trade war, slower global growth and weaker global demand for technology and electronics are major headwinds facing Singapore’s manufacturing sector going forward. That said, the manufacturing sector is still seen expanding, albeit at a markedly slower pace than in recent years.
Author: Steven Burke, Economist