PMI edges up 0.1 to 49.9 in August

New orders, factory output and inventory improved.

Singapore’s purchasing managers’ index (PMI) continued to see slight improvements after inching up 0.1 point to 49.9 from 49.8 in July although the headline figure marked the fourth consecutive month of contraction, according to the Singapore Institute of Purchasing & Materials Management (SIPMM).

A PMI reading below 50 indicates contraction and those over 50 indicate expansion.

Also read: PMI climbs 0.2 point to 49.8 in July

The slight recovery in August can be attributed to the marginal expansion in new orders, factory output, as well as a slower contraction in inventory. However, the new exports index recorded a first-time contraction since August 2016, when the reading was 49.3.

Slower rates of expansion were recorded for the indexes of imports, input prices, finished goods, and supplier deliveries. The order backlog index and the employment index continued to moderate for the 11th consecutive month and third consecutive month, respectively.

“Anecdotal evidences of the survey suggest that foreign manufacturers are exploring opportunities to collaborate with local manufacturers to overcome the high tariffs imposed on their countries,” said Sophia Poh, vice president for industry engagement & development at SIPMM.

Meanwhile, the electronics sector PMI posted a reading of 49.4, up 0.1 point from the previous month. It marks the 10th consecutive month of contraction amidst slower contraction of new orders, inventory and employment level.

Also read: MTI downgrades Singapore's 2019 GDP forecast to 1.5-2.5% amidst weakening outlook

Electronics factory output posted a slightly faster contraction whilst the new exports index of 49.2 for the sector saw its lowest reading since the index first contracted in January 2019. On the other hand, the indexes of input prices and supplier deliveries posted slower rates of expansion and the electronics order backlog index is still moderating for 16th consecutive month.