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SINGAPORE (ICIS)–The country’s manufacturing
purchasing managers’ index (PMI) rose
marginally to 49.9 in August from 49.8 in July,
marking the third consecutive month of
improvement, according to data from the
Singapore Institute of Purchasing and Materials
Management.
A PMI reading above 50 indicates expansion
in the manufacturing economy, while a lower
number denotes contraction.
However, the August SIPMM reading implies the
sixth straight month of contraction in overall
activity for the manufacturing sector, after a
neutral print of 50.0 in February.
Prior to February, five straight months of
contraction was observed.
The index for factory output turned
expansionary (50.1 from 49.9) for the first
time in August after four straight months of
contraction while order backlog turned even
more positive in August (50.3 from 50.2),
implying improving demand prospects, according
to Singapore-based UOB Global Economics &
Markets Research.
“While we are heartened by the third
consecutive month of marginal improvement in
the headline PMI, the sub-50 print corroborates
our view that Singapore still faces headwinds
in the manufacturing sector as many key
sub-indices of the PMI remain in contraction
territory,” UOB said.
” Given the mixed picture, it is too early to
call for a manufacturing recovery… The
headline PMI could turn expansionary (above
50.0) in the next few months. We maintain our
forecast for Singapore’s 2023 manufacturing to
contract by 5.4%,” it said.
PRIVATE SECTOR PMI IMPROVES
SHARPLY
Singapore’s private
sector PMI, meanwhile, expanded solidly in
August amid higher demand, financial
information services provider S&P Global
said in a report on Wednesday.
The S&P Global Singapore PMI rose to 53.6
in August, up from 51.3 in July, signalling a
sixth consecutive monthly improvement in
private sector conditions.
“August data revealed that incoming new orders
rose at a markedly faster rate, underpinned by
widening customer bases and with improvements
in underlying demand conditions,” S&P
Global said.
External conditions continued to worsen,
however, with new business from abroad falling
at the quickest pace since November 2020, it
said.
“The one area of concern lies with exports with
the seasonally adjusted new export orders index
remaining well in contraction territory,” said
Jingyi Pan, Economics Associate Director at
S&P Global Market Intelligence.
“Sitting at a crossroads of the global economy,
the data from Singapore further outlined the
weakness in global trade over the latest survey
period.”
Singapore’s external demand outlook for 2023
remains weak, with the downside risk
factors and more persistent inflation inducing
tighter global financial conditions.
Negative impacts on spending and the ongoing
manufacturing downturn, escalations in the
Russia-Ukraine conflict, and geopolitical
tensions will lead to “renewed supply
disruptions, dampen consumer and business
confidence, as well as weigh on global trade”,
according to the Ministry of Trade and
Industry.
Singapore is a major petrochemicals
manufacturer and exporter in southeast Asia.
Its petrochemicals hub Jurong Island houses
over 100 global chemical firms, including
energy majors ExxonMobil and Shell.
Thumbnail photo: Pasir Panjang Container
Terminal in Singapore (Photo by WALLACE
WOON/EPA-EFE/Shutterstock)
Focus article by Nurluqman
Suratman
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