Local growth stuck in the doldrums on back of waning customer demand

New export growth slowed in December.

Business conditions in Singapore posted extremely marginal growth in the last month of 2015, according to a report by Nikkei and Markit.

Although Singaporean private sector output grew in December, the rate of expansion slowed slightly on a month-on-month basis. Overall new business was also flat in December, following a marginal expansion in November. Reports from panellists suggested that relatively subdued client demand had limited growth in new work at the end of 2015.

“A further modest improvement in operating conditions faced by Singaporean private sector firms was seen at the end of 2015. However, demand conditions remain relatively subdued, with overall new work stagnating and new export orders rising at a weaker pace,” said Annabel Fiddes, Economist at Markit.

Following a two-month period of falling employment, staff numbers at Singaporean private sector firms stabilised in December. Meanwhile, backlogs of work rose marginally over the month, offsetting a fractional decline in November. 

Purchasing activity increased for the first time since August in December, with some companies raising input buying due to higher new orders. That said, the rate of growth was only slight.

Higher purchasing activity contributed to a renewed expansion in inventories of inputs in December. As was the case for purchasing activity, however, the rate of accumulation was marginal. 

“Firms took a cautious approach to employment and purchasing activity, with staff numbers littlechanged in December and input buying rising only slightly. This suggests growth projections for the start of 2016 remain muted, as companies await a much needed pick-up in client demand,” Fiddes said.