Business

PMI logs slowing expansion


Manufacturers have enjoyed a run of strong growth this year but activity in the sector is showing signs of tapering off.

The purchasing managers' index (PMI), an early indicator of manufacturing activity, logged its ninth straight month of expansion last month. But the reading dipped slightly from the preceding month - coming in at 50.8 from April's 51.1 reading.

A reading of 50 and above indicates expansion.

Last month's slower pace of growth was attributed to a dip in employment in the sector, as well as slower growth in factory output, domestic and export orders, and inventory levels.

Meanwhile, the PMI for the electronics sector posted a reading of 52.4 last month, indicating that economic activity picked up compared with April's 51.6 reading.

This was the highest recorded reading since October 2014 and the sector's 10th straight month of expansion.

It comes on the back of higher domestic and export orders, factory output and employment.

GLOBAL DEMAND

Strong global demand for electronics - in particular, semiconductors - has given Singapore's manufacturing sector a shot in the arm since the fourth quarter of last year.

The PMI data was compiled by the Singapore Institute of Purchasing and Materials Management from a monthly poll of purchasing executives at about 150 industrial companies.

Manufacturing has had a "fantastic run", expanding over the past eight to nine months, noted DBS senior economist Irvin Seah.

He added that "at some point in time, the growth rate would naturally start to ease off". However, the electronics cluster appears to be benefiting from a second wind, said Mr Seah.

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