It was bolstered by faster rises in output and new orders.
The headline Nikkei Singapore Purchasing Managers’ Index (PMI) for the private sector rose from 53.7 in March to 55.6 in April 2018. According to an announcement, this was the highest in nearly four years and signalled a strong improvement in the health of the sector.
Nikkei noted that the growth regained momentum at the start of the second quarter. “Driving the upturn was faster expansions in both output and new orders. As a consequence, firm client demand led companies to raise hiring, purchasing, and build-up inventories,” it said.
Despite these efforts, capacity pressures continued to mount in the sector, as signalled by a further rise in backlogs of work. “Supply chains remained stretched while inflationary pressures intensified, with a sharp rise in wages recorded. Businesses remained optimistic,” Nikkei added.
IHS Markit principal economist Bernard Aw commented, “Singapore’s private sector economy kicked up into a higher gear at the start of the second quarter, with business activity expanding at a faster pace in April. The further good news came in the form of a strong pickup in new business intakes, especially in export sales.”
However, Aw noted that prices are being pulled upwards by the strength of the upturn, resulting in steep wage growth. “The latest survey data thereby supports the view of Singapore’s central bank that faster wage growth and rising domestic demand will drive inflation higher,” he added.
The Nikkei Singapore PMI is a composite index based on questions on new orders, output, employment, suppliers’ delivery times and inventories, thereby providing an early indication of the health of the private sector economy.
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