Chart of the Day: Here’s why manufacturing’s road to recovery is tougher than it looks

Manufacturing PMI inched up by a miniscule 0.3.

It's easy to get one’s hopes up when Singapore’s manufacturing and electronics PMI has snapped a three-month skid, but it's actually absurd to celebrate as figures remain in contraction territory--nothing new.

According to analysts from OCBC, the slight uptrend was a result of new orders and new export orders from September, pointing towards a stronger order pipeline mingled with higher production and inventory drawdown indices.

However, OCBC says the manufacturing and electronics PMI levels are still miles away from a those registered a year ago.

“Moreover, the deterioration in the import, input prices, employment and supplier deliveries indices suggest that the recent uptick could be more seasonal and may not last into 1Q16,” OCBC said.

The pattern of uncertainty also reflects results of recent manufacturing business expectations survey, where a net 16% expect gloomier business situations for the next six months, with most clusters excluding biomedical bracing for less conducive atmospheres.

“The employment PMI index for the manufacturing sector has also weakened since May to 48.2 in October (lowest since October 2012) and reinforces our view that the manufacturing sector will likely continue to net shed jobs in the coming quarters,” OCBC said.

“On balance, the manufacturing sector may have bottomed in 3Q15, but the recovery going ahead may remain an uphill climb,” they added.