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S'pore's factory output rises, bucking Asian trend
Publication Date : 06-05-2014
Manufacturing activity in Singapore kept picking up pace last month, even as factories elsewhere in the region started the second quarter on a softer note.
The closely-watched Singapore Purchasing Managers' Index (PMI) reached its highest level in seven months, as manufacturers reported more new domestic and export orders, as well as growth in production and inventory.
This sent the monthly gauge of manufacturing activity to 51.1 in April, up from 50.8 in March.
A reading above 50 indicates growth. The PMI has been in expansionary territory for four straight months.
The numbers add to the recently brighter mood in manufacturing, which makes up a fifth of Singapore's economy.
In the first three months of the year, the sector grew 9.8 per cent, up from earlier estimates of 8 per cent.
A recent Economic Development Board survey showed factory bosses generally expect to do better in the six months between April 1 and the end of September than in the first three months of the year.
The PMI is compiled by the Singapore Institute of Purchasing and Materials Management (SIPMM) from a survey of more than 150 industrial firms.
Elsewhere in Asia, PMI numbers were less upbeat despite gradually recovering global economic sentiment.
China's factories saw declining output in April, according to a private survey, making it the fourth consecutive month of slowing activity. The result, which came in below expectations, sent Asian stocks lower, including the Hong Kong market which ended down 1.28 per cent. Singapore stocks lost 0.34 per cent.
South Korea and Taiwan also reported a slight easing in April's manufacturing growth compared with March, while business conditions in the Japanese manufacturing sector deteriorated in April for the first time in 14 months, partly owing to an increase in the country's sales tax.
The lift to Singapore's manufacturing sector in April likely came from the chemicals and transport engineering sectors, said CIMB economist Song Seng Wun.
This is because the PMI for the electronics sector - which makes up about a third of manufacturing output here - slipped from March's 51.6 to 50.4 in April.
This, and recent weak electronics export data, appears to suggest "that Singapore's tech recovery is still lagging behind the tech recoveries in Taiwan and South Korea", Song said.
However, re-exports of electronics have been showing healthy growth, in line with the sector's stronger factory output numbers.
"Fingers crossed, Singapore's manufacturing will catch up when global demand strengthens further," he added.
It is "heartening" that the data shows Singapore manufacturers recording more new orders in both domestic and overseas markets, said Janice Ong, executive director of SIPMM.
"This is despite a strengthening local currency, as well as the uncertain global economic conditions, which continued to pose tough challenges to the local business environment," she added.