Private sector output at 5-month high

Operating conditions for Singapore firms picked up slightly last month as output and new orders rose, according to a new survey.
Operating conditions for Singapore firms picked up slightly last month as output and new orders rose, according to a new survey.PHOTO: ST FILE

Operating conditions for Singapore firms picked up slightly last month as output and new orders rose, according to a new survey.

The Nikkei Singapore Purchasing Managers' Index (PMI) reached a five-month high in June, although this was dampened by a decline in export sales amid lacklustre demand overseas.

Firms also continued to cut staff last month, the survey of private sector companies showed.

The Nikkei PMI posted a reading of 52.3 for June, up from 50.1 in May. Readings above 50 signal an improvement in business conditions on the previous month.

The latest rise, though modest, was the strongest seen in five months.

Unlike a PMI survey released earlier this week that covers only manufacturing firms, the Nikkei measure is based on data compiled from monthly questionnaires to executives in about 400 private sector firms.

The latest rise, though modest, was the strongest seen in five months. Unlike a PMI survey released earlier this week that covers only manufacturing firms, the Nikkei measure is based on data compiled from monthly questionnaires to executives in about 400 private sector firms.

These are selected to represent the structure of the economy and include companies from the manufacturing, services, construction and retail sectors.

Markit, the financial information services provider which compiled the survey, said some of the companies that responded to the latest poll recorded higher sales, thanks to better underlying demand and promotional activity.

However, external demand remained weak, with new export orders declining for the fourth month in a row, and at a sharper rate than in May.

Markit economist Annabel Fiddes said the marked fall in new export sales "highlighted a fragile global economic environment, which weighed on overall new-order growth in June".

"With rising uncertainty overseas, including the recent Brexit decision, it will be important to monitor the PMI data in the coming months to see whether growth momentum is sustained into the second half of the year," she added.

A version of this article appeared in the print edition of The Straits Times on July 06, 2016, with the headline 'Private sector output at 5-month high'. Print Edition | Subscribe