We're headed south: Manufacturing output growth to take a plunge in May

Everyone's already getting the jitters.

It has been confirmed--Singapore's manufacturing output growth is about to go in the red by an estimated half of previous month's pace.

According to DBS, manufacturing output growth is expected to moderate sharply in May. The industrial production index due today will likely register a modest expansion of 2.4% YoY in May14. 

Here's more from DBS:

This is about half the pace in the previous month and the risk is on the downside. Moreover, this follows the recent easing in the manufacturing PMI.

The headline manufacturing PMI moderated by 0.3pt to register 50.8 in the month. While the manufacturing sector is expected to remain in expansion mode (above 50), almost all the sub-indexes have declined, suggesting a gradual easing in production.

This is consistent with our long held view that barring any significant downside risk in the global economy, the PMI figures will likely ease but remain above 50 due to a benign growth outlook in the external environment. Manufacturers are essentially recalibrating their expectation as well as their production cycle in anticipation of a marginally slower pace of improvement in demand.