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Singapore private-sector May PMI at 50.1, conditions 'broadly unchanged' after April's dip
PRIVATE-SECTOR business conditions in May were "broadly unchanged" after deteriorating in April, an economy-wide indicator released on Friday morning showed, prompting calls for more stimulus for the sector.
The Nikkei Singapore purchasing managers' index (PMI) for May was at 50.1, said Markit, a financial information services provider in a press release.
Readings above 50 signal an improvement in business conditions in the previous month, while readings below 50 show a deterioration.
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.
"At 50.1 in May, the headline PMI was fractionally above the neutral 50 value and indicated that the health of the sector was broadly unchanged in May," said Markit in the release.
May's slight pick-up was attributed to a faster rate of output expansion in the private sector, said Markit, but its pace was still slow. "Although the rate of growth picked up from April's 31-month low, it was moderate overall and remained slower than the series average," said Markit.
In contrast, weaker demand for firms was more pronounced in May. For one thing, new orders fell for a second consecutive month in May, but this slowed at a marginal pace.
Furthermore, the rate of contraction in new export business was "solid" in May despite easing in April. "A number of panellists commented on weaker foreign client demand, mentioning Europe and the US in particular," said Markit.
As a result, domestic employment in the private sector fell in May, and buying activity weakened.
This also had a bearing on inflation, as price pressures cool in May.
There is therefore room for more stimulus measures to help the private sector, said Annabel Fiddes, economist at Markit.
"Sluggish growth, relatively subdued demand and weakening inflationary pressures all leave scope for further stimulus measures to help lift the sector, particularly to help offset the impact of a slowing global economy," she said.