Singapore's manufacturing activity continued to expand in June, but the pace slowed for the third consecutive month.
The more muted numbers in Singapore and across the region came before tariffs on American and Chinese goods kick in later this week, and are seen as a sign that United States trade policy could hit global growth.
The suggestion is that world trade has peaked, raising concerns that the strains on regional economies will intensify as the effects of trade ripple through global supply chains.
"We expect the net contribution of trade to growth to become negative in the second half of the year, if it hasn't already for some countries," ANZ Asia economist Eugenia Victorino told Reuters.
There were hints of that slowing world market in Singapore's June performance.
The Purchasing Managers' Index (PMI), a key indicator of econo-mic activity, dipped 0.2 point to 52.5. A reading of 50 and above indicates growth.
The Singapore Institute of Purchasing and Materials Management (SIPMM), which compiles the data, attributed June's reading to slower growth in factory output, new orders and new exports, as well as slightly lower inventory levels.
Despite the dip, June's number made it the 22nd consecutive month of expansion.
The electronics sector PMI, which has expanded for 23 straight months, was down 0.4 point to 51.9. This was due to slower growth of new orders and inventory, said SIPMM.
OCBC Bank's head of treasury research and strategy Selena Ling noted that the softer June readings were not unexpected "as other global and regional manufacturing PMIs had begun signalling some signs of weakness amid the ongoing global trade war headwinds".
But given that both headline PMI and electronics remain in expansion, she added that manufacturing and electronics growth momentum could decelerate into the third quarter "but not fall off the cliff yet, barring a full-scale outright trade war situation".
Exports from manufacturing powerhouses China and Japan contracted last month, while businesses across Asia took on higher input costs as the price of oil and other commodities rose.
The Nikkei Asean manufacturing PMI slipped to 51.0 in June from May's four-year high of 51.4.
Thailand, Indonesia and the Philippines saw continued but slower expansion, while Myanmar's PMI dipped to neutral.
Vietnam saw faster expansion, while Malaysia's PMI rose to a three-month high, though remaining in contraction.
South Korea's PMI improved but remained in contraction, China's Caixin manufacturing PMI continued expanding but at a slower rate, while Taiwan saw faster expansion.