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Singapore's manufacturing activity contracts again in December: PMI

The latest Purchasing Managers' Index (PMI) reading released on Monday (Jan 4) came in at 49.5, an improvement from the November reading of 49.2, but represented the sixth straight month of contraction. 

SINGAPORE: Manufacturing activity in Singapore contracted for the sixth straight month in December 2015 amid a further decline in new orders and new export orders as well as production output.

The latest Purchasing Managers' Index (PMI) reading released on Monday (Jan 4) came in at 49.5, an improvement from the November reading of 49.2. A reading above 50 means that the manufacturing economy is generally expanding, while a reading below 50 indicates contraction.

Manufacturing activity in the electronics sector also contracted in December, with the PMI coming in at 48.9, a slight dip from November's 49.0. This is the sector's sixth consecutive month of contraction amid a further decline in new orders from domestic and overseas markets.

According to Dr Tan Khay Boon, a senior lecturer at SIM Global Education, it is not surprising that the electronics segment remains the sector's weakest link. 

"It continues its declining trend with no clear turnaround in sight. It will require a large surge in external demand to take the manufacturing sector out of the woods," he said. 

Production output contracted, but inventory expanded in the latest PMI.