Singapore PMI slips to 50.5 in October

It went down from the 19-month high of 52.9 in September.

While Singaporean private sector output continued to expand in October, the rate of increase slowed considerably from the previous month, with headline PMI slipping to 50.5 during the past month.

According to Nikkei Singapore PMI by IHS Markit, this was the weakest increase in output for three months. The recorded PMI was in contrast with the 19-month high record at 52.9 in September. Likewise, growth in total new orders eased since September, although the rate of expansion remained above the average for 2016 so far.

Economist Bernard Aw said both output and new orders expanded at slower rates despite new foreign sales rising at the fastest rate since January.

"Softer growth in business activities contributed to companies becoming more cautious with regard to employment and inventories. Payroll numbers fell for the first time in three months, while the ongoing drawdown of pre-production inventories accelerated to a record high," Aw noted.

He added that this came as greater average cost burdens led firms to raise their selling prices for the fourth month in a row.

"If client demand shows further signs of cooling in the coming months, Singapore's private sector will face some tough times ahead,” the economist furthered

In contrast, growth in new export sales quickened to a nine-month record. This had helped to support total new business inflows.

Meanwhile, softer expansions in activity and new work contributed to renewed job cuts across the private sector, albeit at a marginal pace. Some survey respondents commented on having fewer part-time workers.