August was an especially turbulent month for the global economy and offered beleaguered local manufacturers no respite, according to data released yesterday.
The Purchasing Managers' Index (PMI) - an early indicator of factory activity - hit 49.3 last month, following a reading of 49.7 in July.
A reading below 50 implies there was a contraction.
The figures came as another round of disappointing manufacturing data from China sent global markets into a tailspin. China's manufacturing PMI fell from 50 a month ago to 49.7 last month, its lowest level in three years, corroborating earlier indications of a slowdown.
Nevertheless, most bourses in the region reversed hefty morning losses yesterday to sit in positive territory by the afternoon, in the latest session of roller-coaster trading.
The Straits Times Index, which has been sliding since Monday, fell 0.16 per cent to 2,878.13 yesterday.
The Shanghai Composite Index, China's main stock benchmark, plunged nearly 5 per cent at the start of trading but recovered to close 0.2 per cent down.
Economists say factory output is sliding across the region, with little prospect of a quick rebound.
Manufacturing, which makes up a fifth of Singapore's economy, has been hit hard by restructuring, rising costs and tepid global demand.
Yesterday's data showed declines in new orders, new export orders, production, inventories, imports and employment.
The data was compiled by the Singapore Institute of Purchasing and Materials Management from a survey of more than 150 firms.
The PMI for electronics, which makes up a third of the manufacturing sector, dropped to 49.0 last month after July's 49.5 reading.
The numbers are "indicative of broad-based weakness, so there is no light at the end of the tunnel at this juncture", said OCBC economist Selena Ling.
She said Singapore's weak readings are consistent with lacklustre numbers in China, Taiwan, South Korea, Malaysia and Indonesia. The tepid regional outlook could raise the odds of a technical recession - two consecutive quarter-on-quarter declines in gross domestic pro-duct - this quarter if the services sector also falters, she added.
Yesterday's PMI data came alongside a Monetary Authority of Singapore survey showing that economists now tip a 2.7 per cent contraction in manufacturing this year. The same poll in June had tipped growth of 0.5 per cent.
Mr Frederic Neumann, co-head of Asian economics research at HSBC, noted that manufacturing is sliding across Asia. Weak PMIs in Taiwan and South Korea - economies at the cutting edge of global industry - are "not terribly reassuring", he said.
The risk is that the slide in manufacturing will start to weigh on local demand, Mr Neumann added, noting: "It's not that the roof has caved in, so far. Trouble is, though, the trend is unmistakably pointing to further weakness ahead, if not a collapse. And it's hard to see what would turn things around quickly."
A rate hike in the United States is unlikely to have much impact on global sentiment, though "a more muscular response" from China to revive its economy might help, he added.