Singapore factory activity inches back to ‘limbo state’ while electronics PMI picks up pace
The overall purchasing managers’ index is up 0.1 point to 50 in August
[SINGAPORE] Overall factory activity in the city-state inched back to neutral in August, in parallel with the general improvement seen in the region.
Data from the Singapore Institute of Purchasing and Materials Management on Tuesday (Sep 2) showed that Singapore’s purchasing managers’ index (PMI) crawled up 0.1 point to 50 in August, after dipping briefly the month before.
A reading above 50 indicates expansion.
“Fifty is the dividing line between contraction and expansion, so it could be a ‘limbo’ state,” said OCBC chief economist Selena Ling.
She added that manufacturers may have been hopeful that reciprocal tariffs that kicked in on Aug 7 were “less punitive than initially feared”, even if they remain somewhat cautious of the possibility of additional sectoral tariffs.
Meanwhile, the electronics sector PMI made more marginal gains with a 0.2-point expansion to 50.4, marking a third month of growth.
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UOB associate economist Jester Koh said this indicated “resilient end-demand”.
“This is likely due to a combination of lingering front-loading activity in anticipation of potential US sector-specific tariffs on semiconductors… and structural AI-related demand from the US,” he said.
The latter, he added, is evidenced by the surge in US gross private domestic investment in information processing equipment and intellectual property in recent quarters.
Still, DBS senior economist Chua Han Teng expects electronics manufacturers to face a “looming storm” from uncertainties arising from US sectoral tariffs on semiconductors, even if specific exemptions could mitigate the impact.
Elsewhere, China’s official PMI rose 0.1 point to 49.4, remaining in contraction. Meanwhile, the RatingDog China General Manufacturing PMI, a private index compiled by S&P Global, rose by one point to 50.5, the quickest pace in five months.
Said RatingDog founder Yao Yu: “That’s encouraging, yet we shouldn’t get carried away because external demand looks partly pulled forward while domestic demand stays soft, so the upside to output may be limited unless domestic demand firms up.”
Overall factory activity in South Korea and Taiwan grew, even as the PMI stayed in contraction for both.
The S&P Global South Korea Manufacturing PMI came in at 48.3, up 0.3 point from the month before.
“According to manufacturers, challenging domestic economic conditions and the impact of US tariffs weighed most on the sector, stymieing sales and production levels,” said Usamah Bhatti, economist at S&P Global Market Intelligence.
However, goods producers were moderately optimistic about the coming year, he added, with hopes centred on the launch and mass production of new products and an “alleviation of domestic economic malaise”.
Taiwan’s PMI rose 1.2 points to 47.4, also remaining in contraction.
Annabel Fiddes, economics associate director at S&P Global Market Intelligence, said businesses often noted that uncertainty over future US trade policy had led to greater hesitation among clients to commit to new projects.
“When there is greater clarity on the future trade relationship with the US, it’s hoped that this will feed through to greater confidence and help place the sector back firmly into growth territory,” she added.
In South-east Asia, Thailand recorded the highest PMI reading at 52.7, an improvement of 0.8 point. This was the kingdom’s fastest expansion since July 2024.
“New order growth accelerated to a solid pace, spurring a sharp rise in production,” said Pan Jingyi, economics associate director at S&P Global Market Intelligence.
“Business confidence also improved and was reflected in actions by manufacturers, who raised their purchasing activity and (attempted) to hire more staff, though efforts in the latter were dampened by employee resignations.”
Indonesia’s S&P Global PMI rose by 2.3 points to post a reading of 51.5, helped by both output and new orders.
The S&P Global Malaysia PMI, meanwhile, inched up 0.2 point to 49.9, as production rose for the first time in 15 months.
However, the outlook remains clouded, Bhatti said. “The overall degree of optimism slipped to the lowest level since June 2021, as firms expressed concerns about the strength of demand and the global economic outlook.”
The Phillipines bucked the trend with a 0.1-point drop in its PMI to 50.8.
“While overall sentiment in the year-ahead outlook remained optimistic and even strengthened compared to the previous month, confidence fell short of the long-run average,” said Maryam Baluch, economist at S&P Global Market Intelligence.
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