Manufacturing PMI tumbles back into negative territory in July

Manufacturers have become more bearish.

Singapore’s manufacturing PMI is back in the red with a reading of 49.7 in July, down from a positive reading of 50.4 in June.

According to DBS, the electronics cluster is now back in the contraction mode at 49.5, after a brief and modest inventory restocking exercise, which lifted the index to 50.3 previously.

“Clearly, this is a typical case of earlier optimism by manufacturers now being weighed down by the “hard truth” of weak demand,” DBS said.

DBS noted that the surprise expansion in June was clearly unsustainable given the poor performance in regional PMIs and the slow manufacturing activities in China

“Latest China’s PMI has also dropped deeper into contraction. Moreover, the PMI is ultimately a sentiment gauge of the purchasing managers within the manufacturing sector. And sentiments do swing. In this instance, manufacturers have obviously become more bearish,” DBS noted.