Singapore PMI up 0.2 point in November, echoes improved regional factory activity
The improvement may be due to a front-loading of production and exports ahead of Trump’s proposed tariffs, economists say
SINGAPORE’S overall factory activity rose in November, mirroring a region-wide improvement in manufacturing sentiment.
The Purchasing Managers’ Index went up to 51 last month, an improvement of 0.2 point from October, which registered a marginal dip, data from the Singapore Institute of Purchasing and Materials Management (SIPMM) showed on Monday (Dec 2).
A reading above 50 indicates expansion.
The electronics sector PMI came in at 51.6 in November, also marking a 0.2-point gain after briefly skidding the month before.
This marks the 15th month of expansion for the overall manufacturing sector, and the 13th month for the electronics one.
Economists told The Business Times that the positive readings likely indicate some degree of front-loading of production and exports by manufacturers hoping to avoid any potential tariffs that US President-elect Donald Trump may impose.
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A telltale sign is the improvement in the indices for new orders, new export orders and output, all of which saw “particularly stark” improvement, said UOB associate economist Jester Koh.
Just last week, Trump vowed to levy tariffs on three of America’s closest trading partners, including China, once he returns to the Oval Office on Jan 20.
OCBC chief economist Selena Ling said the key question is whether this front-loading may fade when reality kicks in next year.
“Future readings in Q1 2025 may offer a clearer reading of the tea leaves for the 2025 outlook,” she added.
As geopolitical and trade tensions intensify, highly trade-dependent economies such as Singapore are likely to face challenges and downside risks to economic growth over the medium term, said DBS economist Chua Han Teng.
Elsewhere, China’s official PMI also posted a 0.2-point improvement to reach 50.3 in November, a seven-month high.
Meanwhile, the Caixin PMI, derived from smaller private manufacturers, jumped to 51.5 the same month, up from 50.3 in October.
This was a result of improved business optimism, said Wang Zhe, senior economist at Caixin Insight Group. “Surveyed companies expressed confidence in the effects of recent stimulus policies and the economic recovery in the near term.”
However, prominent downward pressures remain, he added, marked by continued contraction in employment.
OCBC’s Ling said that while the Chinese economy has shown signs of stabilisation amid the constant feed of policy stimulus, the concern is whether the efforts will be partly undone by “punitive Trump 2.0 trade tariffs”.
In Taiwan, the S&P Global Taiwan Manufacturing PMI accelerated to 51.5 in November, from 50.2 in the previous month.
Paul Smith, economics director at S&P Global Market Intelligence, said external demand was central to this development, with sales to foreign clients improving at the best pace since early 2022.
“Growth was broad-based, with Asia, Europe and North America all cited as sources of higher demand, which is impressive in the context of the underlying weakness presently apparent in much of the global manufacturing economy,” he added.
South Korea’s PMI, also published by S&P Global, swung into expansion at 50.6 in November, improving from the preceding month’s 48.3.
Likewise, firms there were particularly buoyed by international demand, which rose at the quickest pace for four months, noted Usamah Bhatti, economist at S&P Global Market Intelligence.
Closer to home, the S&P Global Asean Manufacturing PMI increased for the first time in six months to 50.8 last month, a three-month high, up from 50.5 in October.
However, Maryam Baluch, economist at S&P Global Market Intelligence, noted that while demand is still growing, the rate of that growth has slowed to a nine-month low.
“New factory orders, which have been partially weighed down due to falling export sales over the past two and a half years, are crucial for future growth, and this recent trend raises some preliminary concerns,” she said, adding that price pressures also intensified.
“Still, producers in Asean are feeling optimistic, with confidence levels ticking up this month.”
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