Business

Manufacturing activity hits 
eight-year high

Factories kept humming last month, with manufacturing activity rising for the 14th straight month to hit an eight-year high.

The sector - which makes up a fifth of the economy - is still going strong on the back of broad expansion across most segments, economists said.

That was evident in data released yesterday. The Purchasing Managers' Index (PMI) - an early indicator of manufacturing activity - came in at 52.6 in October, up from 52 in September and also the highest reading since December 2009.

A reading of 50 and above indicates expansion.

The Singapore Institute of Purchasing and Materials Management, which compiles the PMI, said the numbers showed broad-based expansion across sectors.

Manufacturing employment also recorded its second straight month of growth, according to this survey.

Of the manufacturing segments, electronics was once again the standout.

PMI for the sector came in at 53.3 last month - down slightly from 53.6 in September but still expansionary.

"Anecdotal evidence from the survey suggests most electronics manufacturers were concerned about the impact of digital innovations on their businesses," the report added.

DBS Bank senior economist Irvin Seah said the easing in electronics PMI indicates that the sector is entering a seasonal lull.

"Still, overall new orders and new export orders are holding up and this is a multi-year high from a level perspective, which continues to point to a strong performance in the coming months," he noted.

The Ministry of Trade and Industry expects manufacturing to have expanded 15.5 per cent in the third quarter, according to advance estimates, which mainly take into account data from the first two months of the quarter.

United Overseas Bank economist Francis Tan said yesterday's buoyant data bucked the regional trend: PMIs elsewhere in the region including in Indonesia, Taiwan and South Korea remained in expansionary territory but edged lower in October.

China's official manufacturing PMI for October also missed expectations, coming in at 51.6, down from 52.4 in September.

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