Singapore factory activity shrinks to 11-year low in April
The Purchasing Managers' Index (PMI) that gauges manufacturing conditions in Singapore slumped to an 11-year low in April, as firms struggled with order cancellations as a result of global coronavirus containment measures.
SINGAPORE, VNA - The Purchasing Managers' Index (PMI) that gauges manufacturing conditions in Singapore slumped to an 11-year low in April, as firms struggled with order cancellations as a result of global coronavirus containment measures.
The index came in at 44.7 for the month, down 0.7 point from March's 45.4 reading, making the third straight month of contraction.
It is also the lowest reading since November 2008 during the global financial crisis, according to data released on May 4 by the Singapore Institute of Purchasing and Materials Management (SIPMM).
The electronics PMI declined 1.3 points to 42.8 in April, compared with 44.1 the previous month. It is the lowest reading since December 2008, when the electronics sector index fell to 41.8.
April's overall and electronics PMI readings were weighed down by faster contractions in new orders, new exports and factory output, the SIPMM said.
However, slower contractions were recorded for employment, inventory and supplier deliveries for the overall manufacturing sector. The indexes of finished goods, input prices, and order backlog also recorded shrank at a slower pace.
DBS Bank senior economist Irvin Seah said that April's continued PMI slide was not a surprise, given that readings in March had already fallen to an 11-year low.
"The readings were expected to be weaker due to the circuit breaker measures, which naturally would affect manufacturing companies," he was quoted by the Straits Times as saying.
He noted that some clusters such as biomedical manufacturing are doing well amid the coronavirus pandemic and helping to offset the decline in other clusters.
The economists also noted the continued contraction in the employment index, as this could signal retrenchments ahead.
OCBC head of treasury research and strategy Selena Ling said the slump in the employment gauge for both the overall and electronics PMIs, heralds impending softness for the domestic labour market.
Seah said that the second quarter of the year could possibly see the bottoming out of the manufacturing downturn, with a gradual recovery to follow in the second half of the year, depending mainly on how much Singapore eases off on circuit breaker measures. – VNA