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CONDITIONS in Singapore's private sector momentarily shook off concerns of a slowdown as they improved to a five-month high in June.
However, dwindling exports in June flagged concerns ahead for the trade-reliant economy.
The Nikkei purchasing manager's index (PMI) in June for Singapore's private sector was at 52.3, a leap from May's 50.1.
A reading above 50 indicates economic expansion, while a reading below 50 points towards contraction.
May's PMI came after April's reading of 49.4, which was the first time that the reading had contracted in over a year. Economists said back then that May's reading was an indication that the economy had not seen improvements from April's contraction.
Markit, the financial services firm that compiled the data, said on Tuesday that the June improvement was driven by more new businesses for private-sector firms here. Though modest, it was the fastest rate of new order growth since March 2015. Firms had said that this was due to improved demand and boost from promotional sales.
But Markit also flagged weak external demand as a cause for concern. New export orders had declined for the fourth month in a row, and at a sharper rate than in May.
Staff numbers also fell for the fourth consecutive month, but at a slower rate than in May.
Said Annabel Fiddes, economist at Markit: "With rising uncertainty overseas, including the recent Brexit decision, it will be important to monitor the PMI data in the coming months to see whether growth momentum is sustained into the second half of the year."