Private firms suffer sharpest increase in work backlogs

Companies held back on staff payrolls in September.

Despite enjoying a steady growth with the upturn in export sales, Singapore private companies saw the sharpest increase in backlogs of work in September.

IHS Markit Economist Annabel Fiddes noted that firms remained wary with their stance towards staff hiring, adding to their payrolls only slightly in the said month. This in turn contributed to the sharpest increase in backlogs of work since August 2012.

“However, companies were cautious with regard to employment and inventories, with staff numbers rising only slightly and inventories of goods being depleted at a solid pace," she said.

She added, "At the same time, improved inflows of new work led backlogs of work to increase at the fastest pace since the series began in mid-2012. This could prompt firms to raise output further over the coming months in order to help ease capacity pressures, particularly if client demand shows further signs of improving.”

This is amidst private firms signalling the strongest improvement in operating conditions from sharper increases in output and new business.

According to the latest Nikkei Singapore Purchasing Managers Index (PMI), the index has inched up from 52.3 to 52.9 in September, with the export business registering growth for the first time since February.