It’s the sixth consecutive month of contraction.
The Singapore Purchasing Manager’s Index (PMI) for December revealed that factory activity is in its sixth consecutive month of contraction, according to a report by DBS.
Although overall Singapore manufacturing PMI has inched up to 49.5 from the previous month’s 49.2, the headline number is stuck in contraction territory on back of declining new orders, new export orders and production output.
Also, the pick-up is more likely as manufacturers front-load production ahead of the Lunar New Year lull in February.
Moreover, electronics PMI slipped marginally by 0.1-pt to 48.9. And while the production sub-index for both manufacturing and electronics PMIs have inched up, it was marred by mixed showings in new orders (including export orders) indices.
The report further notes that producers are running down stocks of finished goods, but are concurrently bolstering inventory in anticipation of stronger orders. This mean that while PMIs will see further improvement in the immediate term, it will likely be unsustainable.
“This is not an upward trend per se but purely seasonal effect at play. Global demand is still weak, which will continue to weigh down on the outlook for the manufacturing sector in the coming months,” asserted DBS.
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