Singapore’s factory activity expands for 19th month in January but at slower pace

SINGAPORE: Singapore’s factory activity in January expanded for the 19th consecutive month, but at a slower rate than the previous month.

The Purchasing Managers’ Index (PMI) in January fell to 50.6 from 50.7, according to data released by the Singapore Institute of Purchasing and Materials Management (SIPMM) on Thursday (Feb 3).

A PMI reading above 50 indicates that the manufacturing economy is generally expanding, while a figure below that threshold points to contraction.

SIPMM attributed the latest PMI reading to slower expansion rates in the key indexes of new orders, new exports, factory output, inventory and employment.

“The indexes of both finished goods and input prices posted faster expansion rates, whereas slower rates of expansion were recorded for the indexes of imports, supplier deliveries and order backlog,” the institute said.

“The supplier deliveries index continues to post nine months of expansion, but it appears to moderate, amid rising concerns of supply disruption due to the pandemic restriction.”

SIPMM vice president for industry engagement and development Sophia Poh said that there is optimism among manufacturers in Singapore despite uncertainty brought about by the COVID-19 pandemic and geopolitical issues.

“The manufacturing sector braces for the new year with uncertainties arising from new COVID-19 variants, and the geopolitical developments that can disrupt supply chains,” she said.

“Nonetheless, local manufacturers remain cautiously optimistic that growth will continue in the new year, and that the sector is well positioned to ride out the crisis.”

The electronics sector PMI in January posted a decrease of 0.2 point from the previous month to record a slower rate of expansion at 50.8. This is the 18th month of expansion for the electronics sector.

“The latest sector reading was attributed to slower expansion rates in the key indexes of new orders, new exports, factory output, inventory and employment,” said SIPMM.

The institute added that all electronics sector indexes except those of finished goods and supplier deliveries recorded slower rates of expansion in January compared to December 2021.

“The electronics finished goods index has posted a second month of contraction after having recorded seven months of continuous expansion,” SIPMM said.

“The supplier deliveries index reverted to a contraction after posting expansion for the earlier three months.”