Singapore June PMI bucks global trend

Index came in at 50.4, slipping 0.4.

Here's from DBS Group Research:

Singapore’s PMIs (June) for the overall manufacturing sector and the electronics segment announced last evening came in pretty much in line with expectation.

The PMI for manufacturing remains unchanged from the previous month at 50.4 while the electronics PMI eased slightly to 50.4, from a reading of 50.8 previously.

It is certainly a pleasant surprise that Singapore’s PMIs have held up despite the fact that global PMIs have been
receding.

For Electronics PMI example, latest US ISM manufacturing index has fallen below the crucial 50 level for the first time since Jul09, essentially indicating contraction in the US manufacturing activity.

While it may highlight a certain degree of resilience in our manufacturing sector, it is unlikely that Singapore’s manufacturing sector will be able to continue to buck the global declining trend.

Singapore’s manufacturing sector is ultimately driven by global demand.

Moreover, the lower electronics PMI is consistent with the easing in electronics inventory restocking process. Unless new product launches later this year are able to inject more impetus into global consumer demand, expect demand to turn increasingly more sluggish against the backdrop of the existing fragile economic conditions.

As it is, almost all sub-indices within the electronics PMI are pointing to further weakness in the electronics activity going forward.

In our opinion, outlook for the manufacturing sector remains uncertain and is tilted more to the downside. In fact, the falling stocks of finished goods could well reflect a less sanguine outlook on consumer demand shared by producers.

Tremendous downside risks remain given the strong external headwinds, which will continue to weigh on the performance of the manufacturing sector in the near future.