SINGAPORE - Singapore's private sector expanded for the second straight month in July although the rate of growth remained modest overall, a survey from Nikkei and Markit Economics showed on Wednesday.
The headline Nikkei purchasing managers' index, or PMI, for the private sector rose slightly to 51.3 in July from 51.1 in June. Any reading above 50.0 signals expansion.
The Nikkei Singapore PMI is based on data compiled from monthly replies to questionnaires sent to executives in over 400 private sector companies, selected to represent the structure of Singapore's economy, including manufacturing, services, construction and retail.
An official PMI covering just the manufacturing sector , released on Monday, showed that Singapore factory activity shrank last month following two months of expansion. The index, compiled by the Singapore Institute of Purchasing & Materials Management (SIPMM), fell to 49.7 last month from 50.4 in June.
Manufacturing, which makes up a fifth of Singapore's economy, has been hit hard by ongoing restructuring, rising business costs and the Singapore dollar's strength, which has made exports pricier.
But the Nikkei Singapore PMI signaled a further improvement in overall operating conditions in July, although the rate of growth was slower than the series average.
Markit said output growth was sustained at a robust pace despite a renewed fall in total new business, and staff numbers rose for the first time in five months.
It noted though that the rate of improvement remained modest overall and slower than the series average.
Said Annabel Fiddes, an economist at Markit: "Private sector companies in Singapore signalled a further robust expansion in output at the start of the third quarter, which in turn contributed to the first increase in staff numbers for five months.
"However, client demand remains relatively muted, with total new work and new export business both declining slightly in July. Unless customer demand starts to show signs of reviving, this could weigh on overall growth of the sector in the coming months."