Singapore manufacturing to crumble in H2: analysts

Don’t count on Q2’s uplift to extend.

While the second quarter of 2016 may have seen Singapore’s manufacturing sector land its first on-year growth since 3Q14, there remains a real risk for the sector’s growth to soften into 2H16.

According to a report by OCBC, the manufacturing purchasing manager index (PMI) in June remains in contraction territory.

Elsewhere, the ongoing global issues including the sustained Chinese economic slowdown and post-Brexit political/economic uncertainty in Europe will likely persist into H2.

“Do note that China (13.6% of total NODX) remains to be Singapore’s top destination for non-oil domestic exports (NODX), followed by the Europe (12.6%) and US (9.5%) in the first five months of this year,” OCBC asserts.

“Thus, the speed-bumps in these respective economies could prove to be significant hindrances to Singapore’s small and open economy, let alone its export-dependent manufacturing sector as well,” it adds.