- POSTED: 05 Feb 2014 23:46
Manufacturing activity in Singapore rebounded in January, after a contraction in the previous month, boosted by a resurgence in the electronics or tech sector.
SINGAPORE: Manufacturing activity in Singapore rebounded in January, after a contraction in the previous month, boosted by a resurgence in the electronics or tech sector.
January's Purchasing Managers' Index (PMI) beat economists' expectations, rising to 50.5 from 49.7 in December, according to the Singapore Institute of Purchasing and Materials Management's (SIPMM's) PMI, which tracks orders and production levels in the manufacturing sector.
Most economists are optimistic that the manufacturing economy will remain in expansionary mode in the months ahead.
A reading of above 50 indicates that the manufacturing economy is generally expanding.
Leong Wai Ho, senior economist at Barclays, said: "The upturn that we've seen in the tech sector that started in North Asia, has finally reached our shores.
"So I'm not surprised by the strength of the pick-up in the PMI for electronics which reached 52, which is a recent high."
Singapore's manufacturers may have also benefited from political unrest in Thailand.
According to the SIPMM, anecdotal evidence suggests that the political turmoil facing
Thailand is having a positive impact on Singapore manufacturers, as more new orders were diverted to the local manufacturers despite the higher costs.
Singapore's manufacturing economy picked up pace in January after two consecutive months of slower growth, amid disappointing production numbers from the world's top two economies.
Parts of the US and China were hit by extremely cold weather which disrupted travel and shipments -- that proved to be a drag on purchasing activity in January and resulted in a mixed picture for global manufacturing.
Alvin Liew, senior economist at UOB, said: "If you look at some of the Asian PMIs -- India, Indonesia, and South Korea -- they were better than expected.
“But if you look at China's number, (it comes) in as a disappointment -- a six-month low. US numbers also fell quite below expectations."
But in Singapore, at least, economists predict manufacturing to make a comeback this year and contribute more strongly to growth than in 2013.