Private sector output, purchasing activity tick up in June

But export sales continued to slump.

Private sector firms saw a stronger improvement in overall operating conditions in June, with overall output rising at a sharper rate as total new orders returned to growth. The latest Nikkei

Singapore PMI showed that purchasing activity rose for the first time in February during the month, on back of an upturn in overall new orders and a solid accumulation of backlogs of work.

The headline PMI rose to 52.3 in June, up from 50.1 in May. This signals the health of Singapore’s private sector. Though modest, it was the strongest rate of improvement seen in five months.

The improvement in the headline index was partially driven by a renewed expansion in total new business, a number of companies highlighting that an improvement in underlying demand conditions and promotional activities had boosted sales.

However, external demand appeared weak, with new export orders declining for the fourth month in a row, and at a sharper rate than in May.

"Singapore’s private sector saw operating conditions improve at a faster rate at the end of the second quarter, with faster growth of output accompanied by a welcome upturn in new business," said Annabel Fiddes, Economist at Markit, which compiles the survey.

“However, the marked fall in new export sales highlighted a fragile global economic environment, which weighed on overall new order growth in June. Furthermore, companies reported a reduction in staff numbers for the fourth successive month, albeit at a marginal pace,” she added.