- POSTED: 05 May 2014 22:18
- UPDATED: 05 May 2014 23:47
Singapore's manufacturing expanded for the fourth straight month in April, boosted by new orders and higher output.
SINGAPORE: Singapore's manufacturing expanded for the fourth straight month in April, boosted by new orders and higher output.
The Purchasing Managers' Index -- a key indicator of manufacturing activity -- was 51.1 in April compared with 50.8 in the previous month.
This was in line with recent PMI data out from the region.
A reading above 50 indicates the manufacturing sector is generally expanding, while a figure below that shows activity is contracting.
The HSBC PMI readings for South Korea (50.2), Taiwan (60.2), India (51.3), and Indonesia (51.1) were all above 50, signalling that the manufacturing sector across Asia is generally expanding.
Mr Francis Tan, an economist at United Overseas Bank, said: "Last Friday, we saw the PMI numbers coming from Taiwan and (South) Korea -- although they turned slightly lower than the previous month, they're still in expansionary mode.
"Likewise, we saw that PMI for Indonesia turned out quite well, and of course, India as well. The main thing is that these countries are also Singapore's largest trading partners, so our economic fates are very much intertwined."
Analysts said it is this inter-connectedness that is the biggest risk to the Singapore economy.
Manufacturing activity from China, the region's behemoth, has continued to shrink.
The HSBC PMI for April came in at 48.1, compared to the official PMI of 50.4.
Mr Jeff Ng, an economist at Standard Chartered Bank, said: "Given that there will be stronger growth from the US and Euro area this year, compared to last year, the majority of downside risks to growth will likely come from the region, given that China is still stabilising and economies like Indonesia is recording slower growth compared to that of last year."
Meanwhile, a corresponding index for the electronics sector in Singapore came in at 50.4.
Mr Ng added: "Overall, electronics is still likely to underperform other industries such as petrochemicals. I think we've seen in the NODX as well as IP numbers so far, the other sectors such as petrochemicals, pharmaceuticals have been stronger than electronics.
"So overall, it shows that the electronics is expected to be recording trend growth, but not outperforming compared to the rest."
This was down a touch from 51.6 in March -- but it is the 15th straight month that the electronics sector is expanding.
Singapore's PMI numbers are closely watched because manufacturing accounts for about a fifth of GDP.