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Singapore manufacturing activity picks up in March, but electronics still in decline

SINGAPORE’S overall manufacturing activity picked up pace in March, reversing the downward trend seen in the previous six months, according to the latest Purchasing Managers' Index (PMI) out on Wednesday.

The overall manufacturing PMI in March stood at 50.8, up 0.4 percentage point from February, which saw the lowest reading since November 2016. A reading above 50 indicates expansion in the sector.

March makes for 31 months of consecutive expansion in manufacturing activity.

However, the electronics sector PMI remained in contraction for the fifth straight month at 49.8, though the reading edged up 0.3 percentage point from February.

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The Singapore Institute of Purchasing and Materials Management, which compiles the index, credited the rise in the overall PMI to faster growth recorded in new orders, new exports, factory output, inventory, and employment level. Finished goods and imports also clocked faster rates of expansion, while input prices grew after contracting in the previous month. However, supplier deliveries saw slower growth and order backlogs continued to contract for the sixth consecutive month despite an improved reading.

For the electronics PMI, the modest improvement was attributed to more new orders, new exports, factory output, as well as imports. Inventory and supplier deliveries posted slower rates of expansion, while input prices recorded a faster rate of growth. Employment and finished goods swung back to expansion. The slide in order backlogs extended to 11 straight months despite posting an improvement in the latest reading.