SINGAPORE - The manufacturing sector showed some signs of recovery as activity expanded for the first time this year, raising hopes for brighter outlook ahead.
The Purchasing Managers' Index (PMI), which indicates the activity level of factories, rose to 50.2 in May after April's 49.4.
A reading under 50 means activity contraction, and PMI has stayed below that level for five straight months before the improvement in May.
Economists said this could be the start of better times ahead for Singapore's exports and growth.
"PMI rose by 0.8 point in May, which was the highest jump since September 2014. This is one of the first positive signs for the economy this year, and may be a harbinger for better growth ahead when we also consider similar improvements overseas," OCBC economist Selena Ling told
Factory activities last month were boosted by higher new orders and production, with both back in expansionary territory. New orders index rose from April's 49.7 to 50.5 in May, while production index jumped from 49.4 to 50.8. The index for stocks of finished goods also increased from 49.6 to 50.1.
Electronics PMI was 49.8 last month, but the reading gained from April's 49.1, showing improved activities and sentiments in Singapore's embattled electronics sector.
But Ms Ling cautioned that uncertainties still persist.
"It's unsure how sustainable the uptick is until we have a few more months of PMI and industrial production reading. For now we still expect second quarter economic growth to hit a trough at around 1.4 per cent, before improving to push full year growth to around 2.5 per cent."
The official first quarter growth was revised up to 2.6 per cent year-on-year, higher than the advance estimate of 2.1 per cent. For the full year, growth will be between 2 to 4 per cent, the Ministry of Trade and Industry said last week.