Factory activity up for sixth straight month in February
Factory activity here rose for the sixth straight month in February, if just a tad slower, in line with upbeat manufacturing data across the region, with a couple of exceptions.
The Purchasing Managers' Index (PMI) - an early indicator of manufacturing activity - posted a reading of 50.9 last month, down from January's reading of 51.
A reading above 50 points indicates growth, while one below 50 indicates contraction.
Earlier this week, China, Japan and the United States reported far stronger PMI figures.
South Korea also reported its best export figures in five years.
But Malaysia remains in contractionary territory.
The dip in the latest Singapore reading was due to a slower rate of expansion in factory output, new orders, new exports, and lower imports, said the Singapore Institute of Purchasing and Materials Management, which compiles the PMI.
The bright spot was manufacturing employment, which continued to expand marginally, rising to a reading of 50.3 last month, from 50.2 in January.
Prior to that, it had contracted since November 2014.
The electronics cluster had a reading of 51.4, down from January's 51.8.
"Nevertheless, the softer February data has to be seen in the context of the January readings, which were the highest since November 2014 (for overall manufacturing PMI) and October 2014 (for electronics PMI)," said OCBC Bank economist Selena Ling.
The slight easing of the PMI did not come as a surprise.
Expectations had been tempered after January's official industrial production data disappointed last week.
The Economic Development Board figures showed that manufacturing output rose 2.2 per cent in January from the same month a year earlier, much lower than the 9.5 per cent expansion tipped by economists.
This was due to an 18.3 per cent contraction in drug production in January, which offset a 14.8 per cent expansion in electronics production.
"It was clear that the manufacturing recovery was not yet running on broad-based engines," Ms Ling said.
DBS economist Irvin Seah said: "A pull-back is imminent. The rapid pace of expansion in the fourth quarter last year was not sustainable partly due to capacity constraints in some industries, and the Chinese New Year lull in China that stretches into early February."
He also noted cyclical effects in clusters such as pharmaceuticals, where January's contraction was a sharp reversal from a 53.8 per cent expansion in December.
Still, economists remain upbeat about the manufacturing sector's growth prospects for the rest of the year.