Singapore’s PMI in October expanded at its fastest pace since March last year as demand continued to improve amid the COVID-19 crisis, underlining a steady recovery for the overall manufacturing sector.
The Purchasing Managers’ Index (PMI) rose 0.2 points from the previous month to 50.5 in October, marking the fourth consecutive month of the expansion and the highest reading since March 2019, according to data by the Singapore Institute of Purchasing and Materials Management (SIPMM).
A PMI reading above 50 indicates the manufacturing economy is generally expanding, while one below that level points to contraction.
“The October PMI reading is an affirmation of the recovery for the overall manufacturing sector,” said Ms Sophia Poh, SIPMM’s vice president of industry engagement and development.
The PMI expanded but the employment rate contracted
October’s PMI reading was buoyed by new orders, new exports, and factory output. However, overall employment continued to contract for a ninth consecutive month, albeit at a slower rate.
Similarly, the supplier deliveries index also saw a slower rate of contraction, while finished goods, imports, input prices, and order backlog all posted slightly faster rates of expansion.
The electronics sector PMI edged up 0.1 points from the previous month to 51 in October, the third month of expansion for the sector, and the highest reading since September 2018.
Ms Selena Ling, head of treasury research and strategy at OCBC Bank, said October’s improvement was “unsurprising since this is the lead-up to the busiest period ahead of the Christmas orders season”.
She added that the readings are an affirmation that the manufacturing sector “remains in the driver’s seat” for the Singapore economy and will likely outperform the services and construction sectors this year.
Like many countries, Singapore’s economy has been battered by the COVID-19 pandemic, although recent data have shown a gradual recovery.
Source: Channel News Asia