Manufacturers’ woes worsen as PMI crashes to two-year low

PMI fell to 49.4 in April.

Singapore’s April Purchasing Managers’ Index PMI fell to 49.4 in April, its lowest reading in over two years.

The biggest drag came from the electronics segment. The electronics PMI sank back into contraction territory at 49.1, dragged down by a decline in new orders, new export orders, production, finished goods and imports.

According to Nicholas Teo of CMC Markets, China’s factory slowdown had a big part to play as local electronics factories are often involved in supplying components to plants in China and rely on manufacturing activity and demand in the Mainland.

“On the whole, this number has come in contrast to the series of positive economic numbers announced here these past few weeks,” Teo noted.

Meanwhile, a report by OCBC Treasury Research stated that the April PMI suggests that a convincing recovery is not on the horizon yet, with local manufacturing sentiments remaining very mixed.

“As such, while we do not expect the domestic manufacturing sector to repeat its dismal 1Q performance when it contacted 3.4%yoy, the momentum improvement in 2Q15 is unlikely to herald a strong recovery,” OCBC Treasury Research noted.