Negative June PMI on the cards after surprise rebound in May

The electronics cluster is still to blame.

Analysts at DBS expect Singapore’s Purchasing Manager’s Index (PMI) to inch lower and slip into contraction mode in June.

Although PMI rebounded to positive territory in May, DBS warns that this could turn out to be a one-off especially given the existing drag from the electronics cluster.

DBS noted that although electronics PMI ticked up in May, overall outlook remains uncertain with many sub-indexes still stuck in the contraction territory. 

“More importantly, much still depend on global outlook, which thus far has remained dicey. Outlook in Europe is clouded by the concerns about Greece’s exit. Data in the US remained mixed with recent growth figure being revised downwards. China’s growth momentum is slowing and there could be more downside risks to that judging from the sharp corrections in its equity markets. In short, chances are high that PMIs may dip back into the declining trend. General outlook for Singapore’s manufacturing sector appears half empty rather than half full,” said DBS.
 

Singapore's PMI data will be released tonight, July 2.