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Economist Barnabas Gan at UOB Group gives his views on the recently published PMI figures in Singapore and their impact on the sector.

Key Quotes

“Singapore’s manufacturing environment saw further signs of stabilisation as seen in the latest Purchasing Managers’ Index (PMI) data for December 2019. According to the data released by the Singapore Institute of Purchasing and Materials Management (SIPMM), overall manufacturing and electronic PMI rose to 50.1 (+0.3) and 49.9 (+0.2), respectively. This marks the third consecutive month where both readings gained, with the overall manufacturing PMI reading increasing above its expansionary 50.0 handle for the first time since April 2019”.

“The gains were likely led by the improving market sentiment surrounding Singapore’s export and manufacturing environment. There were first-time expansion prints in new orders, new exports and employment, while faster rates of expansion in factory output, finished goods, and inventory were seen. Notably, the employment index which rose to 50.1 (+0.5) in December 2019 suggests that hiring sentiment across manufacturing firms have turned positive after seeing six straight months of sub-50 prints.”

“The electronics sector PMI also rose 0.2 point to 49.9, marking its highest level in 13 months. The improved reading is led by slower contraction rates in new orders, new exports and factory output, while the employment index expanded to 50.0 (highest reading since December 2018).”

The latest PMI readings further confirms our view that Singapore’s manufacturing and export environment has largely stabilised following positive developments from the global trade front.”