Private sector output growth slips to 28-month low as demand slumps

Growth momentum will weaken further.

Output by Singaporean private sector companies expanded at the weakest rate since October 2013 in February, according to the latest Nikkei Singapore PMI.

The PMI posted 51.6 in February, down from 52.5 at the start of the year, and signalled a modest improvement in the health of Singapore’s private sector. The reading also marks the slowest pace of improvement seen since last October.

Companies that reported increased output generally commented on higher new orders. However, there were also reports that relatively subdued market conditions had dampened growth.

Furthermore, overall new business increased only slightly in February, as has been the case in each of the past four months. Data indicated that external demand softened over the month, with new export order growth slowing sharply since January to a modest pace.

“Relatively subdued market conditions fed through to modest employment growth across the sector. Unless demand picks up, both at home and abroad, it seems likely that growth momentum will weaken further in the coming months,” said Annabel Fiddes, Economist at Markit, which compiles the survey.