Nikkei Singapore PMI plummets to 50.2 as business atmosphere languishes

Businesses aren’t sprouting like they used to.

The business mood is undeniably gloomy in the city-state, and the latest drop in Nikkei Singapore PMI only confirmed this sentiment. This was further aggravated by a slight drop in employment.

According to a statement by Nikkei, business activity continued its rise, but at a leisurely pace, the slowest in six months. Companies also noticeably lowered their purchasing activity at the start of the fourth quarter.

“Overall input cost inflation remained modest, albeit slightly stronger than the trend shown over 2015 so far. Wages and salaries continued to be the main driver of cost pressures,” the statement said.

Meanwhile, though readings above 50.0 mean an improvement in business conditions, the 50.2 reading was a drop from 51.4 in September, signalling only a fractional improvement in overall operating conditions in the Singaporean private sector economy, said Nikkei.

This month also saw the weakest growth in the current five-month upturn.

Dwindling employment also took its toll on October’s PMI, registering the sixth contraction in the past eight months.

“Despite a fall in incoming new business, the volume of total business activity continued to grow in October. Output has risen continuously since November 2012, and the rate of expansion was solid despite easing to a six-month low,” Nikkei said.

The latest decline, though modest overall, led to a ninth successive monthly contraction in input inventories. Overall input prices continued to rise in October. The rate of inflation was little-changed from September’s seven-month high, but remained weak in the context of the survey history,” they added.