Local private sector firms post muted improvement in operating conditions in March

Stronger domestic demand boosted new order growth.

Local private sector firms saw a modest improvement in overall operating conditions in 1Q16 as stronger domestic demand drove new order growth to its fastest pace in a year.

According to the latest Nikkei Purchasing Managers’ Index (PMI), the speed of output growth was in turn helped by stronger growth in new work.

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below it show a deterioration. At 52.0, the headline PMI for March inched up from 51.6 in February. This signals further improvement in operating conditions faced by Singapore private sector companies.

Meanwhile, firms took a relatively cautious approach to staff numbers and purchasing activity with both seeing renewed declines in March.

Lower employment and increased new business contributed to the fastest rise in backlogs since the survey started in August 2012. Inflationary pressures remained relatively subdued, with total input costs growing modestly and prices charged increasing only marginally.

Data also reveals that new export orders fell for the first time in five months.

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