Weak global semiconductor sales dragged Singapore electronics PMI

It eased to 50.4 in April.

Mixed signals were recorded from April PMIs. DBS noted that the headline overall manufacturing PMI is up 0.3 pt to 51.1 but electronics PMI eased by 1.2 pts to 50.4. The dip in the electronics PMI is pretty much in line with DBS' expectation but the slight uptick in the broader sectoral index did come as a surprise.

Here's more:

We had doubt about the sustainability of the earlier strong showing in the electronics PMI amid unfavourable trends in the global semiconductor sales and the SEMI book-to-bill ratio. The long held expectation is that the electronics PMI will moderate towards the 50 mark but remains in expansion mode as manufacturers consolidate on their production cycle.

And this set of report has reaffirmed such recalibration in manufacturers’ expectation given the broad-based easing in sub-indexes such new orders and production level. However, the uptick in the overall manufacturing PMI has come as a surprise. It is marginal and likely reflects the subtle improvement in global economic conditions.

While almost all the sub-indexes are pointing to stronger production ahead, the dips in the employment index and the inventory level do suggest a pullback in production activity somewhere down the road. So, it remains to be seen whether the overall manufacturing sector will be able to maintain the current level of production.