April PMI hits another two year high, at 50.9

The Purchasing Managers' Index for April has continued its rally, and was at its highest since December 2018.last month.

Singapore's Purchasing Managers' Index (PMI) for April rose to 50.9, showing an optimistic manufacturing sector.

This was also the highest recorded since the 51.1 recorded in December 2018.

The PMI, compiled monthly by the Singapore Institute of Purchasing and Materials Management (SIPMM), measures the strength of the manufacturing sector, by polling over 200 purchasing managers. Production output, new orders, supplier deliveries, inventory and employment are all factored into the computation.

A PMI of over 50 indicates an expected expansion compared to the month previous, while a PMI under 50 indicates an expected contraction.

The electronics sector PMI posted a meager increase of 0.1 point from the previous month to post a faster rate of expansion at 50.7. This is the ninth straight month of expansion for the sector.

Barnabas Gan, economist for UOB Global Economics & Markets Research, said this continued expansion of overall and electronics PMI supports overall economic growth.

"The sustained expansion in Singapore’s PMI is in tandem with the growth in industrial production.Singapore’s industrial production surprised market estimates with a 7.6% y/y surge in March 2021, underpinned by electronic output which expanded 33.7% in March 2021, the fastest growth in three months.We keep our industrial production growth outlook of 5.5% in 2021," Gan said.

He added that the labour market is expected to improve in the coming months.