Factory activity in Singapore rises to four-month high

Singapore's factory activity hit a four-month high last month, as the local manufacturing sector continued to recover despite some weakness across the region.

The latest Purchasing Managers' Index (PMI), released on Monday night, rose to 50.9, the highest level since October last year.

This was up from 50.5 in January. A reading above 50 indicates growth.

New orders and new export orders here continued to expand last month, although by less than in January.

But production, inventories and stocks of finished goods all accelerated from January, which industry observers said could mean factory bosses are ramping up output in anticipation of higher demand.

"Anecdotal evidence suggested that electronics manufacturers are expecting a surge in order demand in the coming months," said Ms Janice Ong, executive director of the Singapore Institute of Purchasing and Materials Management, which compiles the PMI.

She added that this could explain the build-up of inventories - which hit their highest level since December 2011 - as well as the first increase in the stock of finished goods in nearly a year.

Activity in the electronics cluster decelerated, however. The electronics PMI dipped to 51.2 last month from 52 in January.