Business

Singapore manufacturing continues to expand

Positive data shows domestic manufacturing holding up well against global uncertainties

Electronics turned in a robust performance last month to help the overall manufacturing sector record its 24th month of expansion.

The Purchasing Managers' Index (PMI) - a key indicator of economic activity - noted that the electronics sector logged a 0.4-point increase in August from July, to 52.0. A reading above 50 indicates expansion.

The increase was due to higher growth rates in new orders, new exports, factory output and employment. That helped to lift the overall PMI by 0.3 points last month to 52.6 - manufacturing's 24th straight month of expansion, according to the Singapore Institute of Purchasing and Materials Management yesterday.

POSITIVE DATA

The reading is compiled based on a survey by the Institute of purchasing managers in around 150 manufacturing firms.

Analysts said the positive data out yesterday suggests domestic manufacturing is holding up well against global uncertainties such as the US-China trade war.

Last month's PMI was boosted by more new orders, which rose from 53.9 in July to 54.4 in August, as well as new exports, which grew from 52.6 to 53.2.

Factory output expanded faster last month as well, as did hiring, with the employment index up from 50.7 in July to 51 in August, its 12th consecutive month of expansion.

The inventory level recorded its lowest reading since August last year at 52, while the stocks of finished goods grew at a lower rate.

OCBC Bank's head of treasury research and strategy, Ms Selena Ling, said the numbers suggested that domestic manufacturing "is withstanding the deterioration in the external economic environment due to the US-Sino trade war".

Ms Ling added that the data also points to a broadening of manufacturing drivers beyond electronics to pharmaceuticals, especially in the run-up to Christmas.

Global and regional manufacturing PMIs have generally improved as well, with China's official manufacturing PMI rising from 51.2 in July to 51.3 last month.

She also noted that better numbers have been seen in Malaysia, Indonesia and the Philippines, saying this could be partly due to the economies being "likely beneficiaries from the realignment of regional production lines amid the escalating US-Sino trade war and tit-for-tat retaliatory moves".

BUSINESS & FINANCE