Singapore / GDP
Group Research / May 03, 2017
Singapore’s overall manufacturing purchasing managers’ index (PMI) and electronics PMI eased in April, suggesting that manufacturing activities could be nearing the peak.
Photo credit: AFP Photo
Singapore’s manufacturing sector is showing tentative signs of peaking. The purchasing managers’ indices (PMIs) for April saw the overall manufacturing PMI ease 0.1 points to 51.1 and electronics PMI dip to 51.6 from 51.8 previously. While the declines were marginal, the sub-indices may be suggesting that manufacturing activities could be nearing the peak.
The indices for new exports and new orders have moderated, pointing to some degree of softening in demand. Likewise, inventory stock levels and import indices also reflected slower activities from the supply side. Nonetheless, overall manufacturing and the electronics PMIs have been in expansion mode for the past 8-9 months. It has been a fantastic run for the manufacturing sector but at some point in time, the growth rate would naturally start to taper off.
More importantly, the strong performance thus far has been largely driven by consumer demand. To sustain the current pace of expansion, much will really depend on companies increasing their capital expenditure in the coming months. That is, capital investment growth in key markets, such as the US, China, and to a lesser extent, the Eurozone, would have to increase in order to provide further impetus to manufacturing activities.
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