Singapore private-sector conditions soften in Feb as Nikkei PMI falls to 51.6

Business conditions for Singapore's private sector improved at a slower rate in February, with indicators pointing towards softening growth.

The latest Nikkei Singapore Purchasing Managers' Index (PMI), released on Thursday, shows that the index was at 51.6 last month, a 0.9 lower from January.

Readings above 50 signal an improvement in business conditions on the previous month, while readings below 50 indicate a worsening.

Even though this would make it the ninth straight month of improvement, its pace of improvement was at its slowest since October last year, said Markit, a financial services provider that compiled the data in a release on Thursday.

Output expansion slowed, while total new work rose only marginally. Payroll numbers also improved slightly, while firms expanded their purchasing activity at a softer pace, said Markit.

The Nikkei Singapore PMI is an economy-wide indicator of activity, with each sector weighted for its contribution to gross domestic product. Sectors reflected include manufacturing, services, construction, transportation and storage, and retail.

"Relatively subdued market conditions fed through to modest employment growth across the sector. Unless demand picks up, both at home and abroad, it seems likely that growth momentum will weaken further in the coming months," said Markit economist Annabel Fiddes.

The softening of the Nikkei PMI comes as Singapore's manufacturing PMI in February undershot expectations.

The index, released on Wednesday, was down by 0.5 to hit 48.5 in February. This made it the lowest reading since December 2012.