Singapore's manufacturing PMI inched up to 50.9 in February

Here's what boosted this growth.

According to DBS, Feb13 PMIs have lived up to expectation. Overall manufacturing PMI inched up a tad to 50.9, up from 50.5 in the previous month. The production index is still picking up although the build-up in the inventory and stocks of finished goods indexes hint of moderation ahead.

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Moreover, this is evident from the easing in the new orders index. While we expect the manufacturing sector to still stay in expansion level (above 50), a retracement back to the 50 mark appears likely in the coming months.

Separately, the upswing in the electronics cluster is coming to an end. It’s PMI has eased by 0.8pt to 51.2 in the month. New orders, production and inventory sub-indexes have all moderated, suggesting an adjustment in production output level in the making.

Essentially, we believe manufacturers are attempting to unwind on their production level after having ramped up output over the last 6-9 month. As it is, there have been a built up in inventory stock and with that, expect further dip in the electronics PMI ahead as manufacturers make adjustment to their production output.