SINGAPORE'S manufacturing sector, though still stuck in a ten-month recession, saw a broad-based recovery in activity in April.
This was cause for some cheer, but some analysts are not expecting a bottoming-out any time soon.
"Watch out for a PMI (purchasing managers' index) head fake," said DBS senior economist Irvin Seah of the April uptick. "Chance of a sustained improvement in the PMI is not high judging from the outlook in the global economy."
The headline PMI reading for the sector's activity in April, released on Tuesday by the Singapore Institute of Purchasing & Materials Management (SIPMM), divided economists on whether the prolonged recession was coming to an end soon, or if the worst is yet to come.
April's reading was 49.8, a 0.4 point improvement from March. A reading above 50 indicates expansion, and that below, a contraction.
This meant that the manufacturing sector is still contracting since June last year, but SIPMM noted that "the latest readings showed general improvements in almost all indicators, albeit most major indicators remain in contraction".
The broad-based recovery had some analysts wondering if Singapore's manufacturing might soon be out of the woods.
They pointed out that the index for new orders rose by 0.6 point to 49.8 in April - the highest level in nine months. New export orders rose, too, by 0.5 point to 49.6, its highest in five months.
Order backlog expanded for the first time after previously recording 14 consecutive months of contraction. It was at 50.5, up from 49.4 in March.
All these readings suggest "nascent signs of a near-term bottom", noted Selena Ling of OCBC.
DBS's Mr Seah, however, pointed out that the headline PMI rose to above 50 in May and June last year before contracting again, and after adjusting the reading for seasonal effects, the PMI remained contractionary during that period.
"So it remains to be seen whether history will repeat itself," he said.
Tuesday's PMI comes on the back of recent industrial production and business sentiment survey results.
Factory output in March beat estimates to shrink only 0.5 per cent when compared to last year, figures released by the Economic Development Board (EDB) last week show. It prompted some economists to revise their economic growth estimates for the first quarter ended March 31.
A few days later, another EDB survey showed that manufacturers were noticeably more upbeat about prospects from April to September.
These point towards possible stabilisation of demand for Singapore's manufacturing, which is closely tied to regional supply chains, and also those in China and the United States.
Singapore's manufacturing "will remain as one of the more vulnerable ones to a slowdown in the US and China, but will also benefit from a pickup", said Jeff Ng of Standard Chartered.
But DBS's Mr Seah said it's too soon to say whether China's stabilisation can be sustained. China's Caixin manufacturing PMI (a gauge of private-sector manufacturing performance) slipped further into contraction territory in April. It was at 49.4, down 0.3 point from March.
US growth in the first quarter also slowed to 0.5 per cent at a seasonally adjusted annual rate, the weakest in two years.
April PMIs from other regional economies have also shown weakness in the manufacturing sector.
"It's good to be optimistic," said Mr Seah, "but it's also important to be realistic. There's a lack of a growth driver in the global economy, and Singapore's manufacturing cannot sustain itself this way. It's time to be a bit more conservative in our expectations."