Factory activity continued to expand in September to hit a new high for the 13th straight month on the back of stronger growth from the electronics sector.
The robust performance came on the back of a rise in manufacturing employment after four months of contraction.
The purchasing managers’ index (PMI) – an early indicator of manufacturing activity – came in at 52 last month, up by 0.2 points from August’s level of 51.8.
This is the highest reading since April 2011.
A reading above 50 points to growth in the sector; one below 50 indicates contraction.
The Singapore Institute of Purchasing and Materials Management (SIPMM), which compiles the PMI, said the latest reading was driven by a faster rate of expansion across all key indicators. New orders, export demand and output were all up.
The electronics sector gained 0.4 point from August to post a reading of 53.6 – its 14th straight month of expansion and the highest level since July 2010.
This was thanks to a faster rate of expansion across key indicators of the sector, although employment recorded a slower rate of growth, said the SPIMM.
DBS economist Irvin Seah noted that the manufacturing sector grew 11.2 per cent in the first eight months of the year – the highest since April 2011 – and well above the 3.6 per cent for the whole of 2016. September’s PMI reading “shows that the party is not ending yet”, he said.
Still, he noted that the PMIs are not seasonally adjusted, and that the stocks of finished goods indices have moderated, which could reflect the purchasing managers’ expectation of softer demand in view of the upcoming lull towards the end of the year.
“Notwithstanding an anticipated lull ahead, the manufacturing sector is certainly in a boom cycle. Growth in China has been resilient despite earlier concern of slower growth. Economic momentum in the US and Eurozone has also been picking up. All these bode well for the manufacturing sector in the coming quarters,” said Mr Seah.
Source: The Straits Times