SINGAPORE - Factory activity rose for the fourth straight month in December, raising hopes of a cluster rebound after more than a year of contraction .

The Purchasing Managers' Index (PMI) - an early indicator of manufacturing activity - posted a reading of 50.6 in December, up slightly from November's 50.2 reading.

A reading below 50 indicates that more purchasing managers reported a deterioration in business than those noting an improvement.

Last month's improved reading came on the back of higher factory output, inventory holding, new orders and new exports, said the Singapore Institute of Purchasing and Materials Management, which compiles the PMI, in a report out on Tuesday.

The electronics sector PMI posted a reading of 51.2 last month, up from November's 50.5 reading.

"The latest PMI readings indicate resilience of the manufacturing sector in spite of the uncertainties in the global economy," the report noted.

"The manufacturing employment index also recorded a reading towards a moderation level, and this bodes well considering that the index has posted 25 months of contractions."