SINGAPORE - Hopes that the downbeat manufacturing sector had turned a corner were dashed on Tuesday, with new figures showing that factory activity unexpectedly shrank in August in its worst showing this year.

The sector, which makes up a fifth of the economy, also fared worse in August than its regional peers due to economic restructuring and a sluggish global recovery, local economists said.

The Purchasing Managers' Index (PMI), a gauge of anticipated factory orders, fell on Tuesday to 49.7 for August, hitting its lowest point since December last year.

A reading above 50 signals expansion while one below 50 indicates contraction.

It reversed the seven straight months of expansion seen since the start of this year and came in below economist expectations of a reading of 51.

Other manufacturing powerhouses across Asia recorded expansions last month. Taiwan's PMI came in at 56.1 and South Korea's at 50.3, while mainland China's official PMI was 51.1 in August.

The crucial electronics industry, which makes up about a third of Singapore's manufacturing sector, also took a hit last month. Although it continued to expand in August, with a PMI of 50.7, that reading was still 1.7 points lower from July.

The manufacturing sector's economic output rose only 1.5 per cent in the second quarter this year from last year, after climbing 9.9 per cent in the first quarter.