SINGAPORE: Singapore’s factory activity remained in negative territory for the fourth consecutive month in May amid the COVID-19 outbreak, although an uptick in the key gauge may suggest the “resilience” of local manufacturers.
Many countries have started to reopen parts of their economies after months of quarantine measures.
Singapore exited its “circuit breaker” period after nearly two months on Monday (Jun 1). The first phase of the reopening is expected to see 75 per cent of the economy resume operations.
May’s Purchasing Managers’ Index (PMI) - which rose 2.1 points from the previous month - signals the cautious optimism of manufacturers, said Ms Sophia Poh, the vice president of industry engagement and development at the Singapore Institute of Purchasing and Materials Management (SIPMM), on Wednesday.
SIPMM founded the PMI - a key barometer of the Singapore manufacturing economy - in 1998.
Despite the uptick, May’s overall PMI remained in negative territory at 46.8. This is its fourth month of contraction and follows April’s 44.7 reading, which was the lowest since November 2008.
The electronics PMI also recorded its fourth consecutive month of contraction at 46.2 points, up 3.4 from the previous month, said SIPMM.
A PMI reading above 50 indicates that the manufacturing economy is generally expanding, while a reading below 50 indicates that it is generally declining.
May’s overall reading was attributed to “slower contractions in the key indexes of new orders, new exports, factory output and employment”, said SIPMM.
The inventory index and finished goods index expanded this month after three and two consecutive months of contraction, respectively.
Slower contractions were also recorded for the indexes of imports, input prices and order backlog.
“Despite weaker supply chain operations arising from last month’s extended local circuit breaker measures, the latest improved PMI readings indicate the resilience of the local manufacturing sectors,” said Ms Poh.
“Going forward, manufacturers are cautiously optimistic of a gradual recovery towards the latter half of the year,” she said.