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SINGAPORE'S manufacturing sector continued to show optimism in January with the purchasing manager's index (PMI) recording its highest reading in more than two years.
The Singapore Institute of Purchasing and Materials Management (SIPMM) said on Thursday that the sector's PMI rose 0.4 from the previous month to hit 51.0 in January. This is its highest since November 2014, when it was at 51.8.
AN index reading above 50 denotes conditions improving from the previous month, while those under 50 show contraction.
January's PMI beat market forecast. A Bloomberg poll put the median estimate at 50.5, a slower pace of expansion than Dcember's 50.6.
It was led by faster rates of expansion in factory output, new orders, new exports, and inventory holding, said SIPMM.
Not only did the headline PMI hit a record high, all indicators also showed expansion. This indicates a broad-based expansion in the overall manufacturing sector.
"The latest readings of the PMI indicate a gradual growth of the manufacturing sector although the global economy is still fraught with uncertainties," said SIPMM.
The electronics cluster also saw its PMI rise. It improved by 0.6 to hit 51.8 in January. This was due to a faster rate of expansion in factory output, employment, new orders and new exports.
"The latest readings of the electronics sector indicated stabilisation and with growth strengthening for the sector," said SIPMM.
January's PMI, a leading indicator of manufacturing activity, comes just after the sector reported an output surge in December last year.
Industrial production, closely linked to gross domestic product, surged 21.3 per cent year-on-year then. This was a five-year high.