Tech manufacturing index dips for the first time

Depressing PMI dragged backlog orders to its weakest since October 2010 at 47.1.

According to CIMB, after two months of expansion, Singapore’s PMI contracted in Jul, mimicking overall global readings. Headline PMI dipped 0.6 pt to a 6-month low of 49.8, affected by softer orders and output. Tech PMI fell, by 1.2 pts to 49.2, its first contraction in 2012.

Here's more from CIMB:

Singapore, with its open economy, failed to escape from the European troubles which are increasingly dampening global prospects. We’ll review our GDP forecast if order flows continue to stay soft. Manufacturing contracted in July as measured by the monthly PMI, unchanged at 50.4 in Jun, beating consensus and our estimates of 50.1 and 50.0, respectively (+0.7 pt in May).

But that was Jun! A month later, pulled down by lower orders and production, the PMI dipped 0.6 pt to 49.8, its weakest reading since the lunar-new-year-shortened month of Jan. New orders fell 1.2 pts to 49.6 while new export orders dipped 0.9 pt to 50.2. Production fell 0.9 pt to 49.8 with backlog orders shrinking 0.7 pt to 48.5.

Tech manufacturing contracted for the first time this year, with the Tech PMI giving up 1.2 pts to 49.2 (-0.4 pt in Jun), below consensus and our forecasts of 50.0 and 50.8, respectively. New orders fell 1.6 pts to 48.8 (-0.8 pt in Jun), the lowest this year, as export orders retreated another 0.4 pt to 48.8 (-2.4 pts in Jun), also the lowest this year. Tech backlog orders fell 4.5 pts to 47.1, the weakest since Oct 10’s 46.6 while output declined 2 pts to 49.2. Without backlog, overall production will likely be weaker. The outlook for tech has become even more daunting with almost all major leading indicators pointing
to a softer 3Q.

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