Chart of the Day: Manufacturing contracts for the 3rd consecutive month

Electronics PMI dips for the first time in 24 months.

In line with DBS analyst expectations, the headline number fell to 49.7 in the month, down from 49.9 previously. This marks the third consecutive months of contraction for the key manufacturing sector.

Likewise, the electronics PMI posted a contraction at 49.8. This is a sharp dip of 0.7pt over the previous month. This is also the first ever contraction for the sector after having expanded over the past 24 consecutive months.

According to DBS, both sets of readings reflected declines in key sub-indexes such as new orders, new export orders and production output. Inventory levels have started to pile up and production activities have eased. Stocks of finished goods for overall manufacturing have also risen amid the weak demand.

Plainly, while this could be due to the Lunar New Year effect, the trend is not encouraging. Both indices have dipped recently. And that clearly reflects the underpinning sluggish growth in the global economy.