For the first time since 2020, electronics employment index shrinks below 50

Contraction in new orders and exports affected electronics’ performance.

The electronics reading contracted below 50 to 49.8, which is the first time since October 2020, according to the Singapore Institute of Purchasing and Materials Management (SIPMM).

UOB said in its report that the performance of electronics was due to slip in new orders, new exports, output, and finished foods.

Despite the weaker electronics performance, UOB said it is “cautiously positive” on the outlook of transport engineering, general manufacturing, and precision engineering, which will drive overall manufacturing growth.

It noted a subdued demand from North Asia markets, which could impact manufacturing outlook.

The analyst sticks to its growth forecast that Singapore manufacturing will increase 4.5% in 2022 from 13.2% in 2021. It will, however, shrink by 3.7% possibly in 2023 because of the faltering outlook of electronics and weaker demand.

“In the same vein, our full year 2022 GDP growth forecasts are unchanged at 3.5% but growth will likely slow significantly to 0.7% for 2023, as we now project the US and European economies,” read the report.