Singapore factory activity remains in the doldrums

Singapore's Purchasing Managers' Index (PMI) - an early indicator of factory activity - hit 48.6 in September, implying a contraction.
Singapore's Purchasing Managers' Index (PMI) - an early indicator of factory activity - hit 48.6 in September, implying a contraction. PHOTO: ST FILE

SINGAPORE - The manufacturing sector sank further into the doldrums in September amid a still-tepid global outlook and mounting concerns about a looming technical recession here.

Singapore's Purchasing Managers' Index (PMI) - an early indicator of factory activity - hit 48.6 last month, following a reading of 49.3 in August. A reading below 50 implies a contraction.

The outlook for the rest of Asia is also looking bleak - factories in the region cut jobs and production in September as domestic and export demand continued to fall, according to the latest round of disappointing regional manufacturing data.

China's manufacturing sector remained lacklustre in September, according to two separate gauges released on Thursday (Oct 1). The world's No. 2 economy is Singapore's largest trading partner.

The Chinese government's official gauge of factory activity improved with the manufacturing PMI rising to 49.8, up from August's three-year low of 49.7 but still marking two straight months of decline.

Meanwhile, a private survey by Caixin revealed PMI fell to a six-year low of 47.2, down from August's reading of 47.3.

A national holiday across China meant markets in Shanghai, Shenzhen and Hong Kong were unable to respond to the data.

Thursday's PMI data for Singapore, which was released after the markets closed, showed declines in new domestic and export orders, production and employment.

The data was compiled by the Singapore Institute of Purchasing and Materials Management from a survey of more than 150 firms.

Economists say the PMI numbers reinforce the recent spate of poor data from the manufacturing sector and further contribute towards expectations that the central bank will ease monetary policy when it meets next month.

chiaym@sph.com.sg