Manufacturing activity uptick in April likely a one-off blip, says DBS

There’s no improvement in demand.

Singapore’s manufacturing sector is likely to stay stuck in the doldrums despite a slight uptick in the headline purchasing managers’ index (PMI) in April, which rose by 0.4 points to a reading of 49.8.

A report by DBS said that the slight growth was likely only due to a “seasonal lift” and has a slim chance of being sustained in coming months.

“The same phenomenon occurred in the same period last year. After the Lunar New Year period, the manufacturing PMI ventured briefly into the expansion territory in May and June before eventually slipping back into contraction again from July onwards,” DBS noted.

“A look at the seasonally adjusted series shows that the earlier rise was nothing but a head fake. The chance of a sustained improvement in the PMIs is not high judging from the outlook in the global economy,” the report added.