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Singapore PMI December 2023

Singapore: Manufacturing PMI strengthens further in December

The Singapore Institute of Purchasing and Materials Management (SIPMM) Manufacturing PMI rose to 50.5 in December from 50.3 in November. Consequently, the index moved further above the 50.0 no-change threshold, signaling a stronger improvement in manufacturing-sector operating conditions compared to the previous month. Meanwhile, the electronics PMI rose to 50.2 in December (November: 50.1), remaining above the 50.0 no-change threshold and signaling improving momentum in the sector.

The headline print marked the fourth consecutive improvement in operating conditions, suggesting the manufacturing sector’s recovery might be strengthening. December’s reading reflected stronger output growth, new orders and export demand. Meanwhile, growth in employment remained positive but ticked down slightly from the previous month. Lastly, delivery times remained poor and weighed on the overall index.

Alvin Liew and Jester Koh, analysts at UOB, commented on the outlook for the manufacturing sector in 2024:

“If sustained, the broad-based improvement in both the overall and electronics PMI will bode well for an upturn in the electronics cycle and broader goods trade cycle through 2024. […] Into 2H24, the recovery in external demand could gather pace as the Fed and ECB are projected to commence their rate cut cycles, with lower costs of borrowing enhancing households’ and firms’ appetite for consumption and investment respectively.”

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