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  • Singapore’s factory activity snaps 7 months of contraction in December
    Date:2020-01-06 

    SINGAPORE: Factory activity in Singapore returned to growth in December for the first time in seven months, a private survey showed on Friday (Jan 3), boosted by greater demand for goods, especially from overseas.


    Singapore’s Purchasing Managers’ Index (PMI) – which measures manufacturing activity and sentiment – rose 0.3 point from the previous month to a marginal expansion of 50.1 in December, said the Singapore Institute of Purchasing and Materials Management (SIPMM).  It stood just above the 50-point level that separates growth from contraction and was the highest reading since April, when the barometer was at 50.3.


    “The latest PMI reading bodes well for the manufacturing sectors as companies become less pessimistic about trade uncertainties going forward,” said Ms Sophia Poh, vice president of industry engagement and development at SIPMM.


    December’s reading was helped by first-time expansions in the indexes of new orders, new exports, and employment, the survey showed. Faster rates of expansion in the indicators of factory output and inventory also boosted December’s performance.


    The key electronics cluster continued to contract for a 14th consecutive month, with the PMI at 49.9 despite a 0.2 point gain in December.  Singapore’s export-oriented economy has been hit hard by a drawn-out trade war between the United States and China as well as a cyclical global downturn in the electronics sector.


    Gross domestic product (GDP) grew 0.7 per cent in 2019, the slowest annual pace since 2009 and down from 3.1 per cent in 2018.


    Trade worries have abated somewhat in recent weeks, however, after Washington and Beijing reached a partial trade agreement to de-escalate their trade conflict.  A phase one China-US trade deal is set to be signed on Jan 15, a move that will de-escalate their nearly two-year trade war.


    Source: CNA/hs



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