Private sector business conditions deteriorate sharply in April as foreign demand crumbles

Output expanded at the slowest pace in almost 2 years.

Operating conditions in Singapore’s private sector deteriorated in April, as the volume of total new work fell on back of a slowdown in market conditions.

The headline Nikkei Singapore purchasing managers’ index (PMI) dropped to 49.4 in April, compared to a reading of 52.0 in March. Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.

Data indicated that weaker foreign demand was a key factor leading overall new business to decline, as new export work fell at the steepest rate since December 2012. Reflective of weaker client demand, staff numbers and purchasing activity both declined in April, while inventories of inputs fell at the quickest rate in eight months.

A drop in total new orders and softer market conditions both acted as a brake on output growth in April. Subsequently, Singaporean private sector output rose at a marginal pace that was the slowest since September 2013.

“The data suggest new stimulus measures may need to be deployed to counteract sluggish growth, and weak inflationary pressures leave plenty of scope to do so,” commented Annabel Fiddes, Economist at Markit, which compiles the survey.