SINGAPORE - The festive season turns out to have been decidedly unjolly for manufacturers in Singapore.
According to the latest reading of the Singapore Purchasing Managers' Index (PMI), output from factories here shrank in December, after having expanded in the previous three months.
The index - based on a survey of factory bosses across the island - stood at 49.6 last month, a hefty decline of 2.2 points from November.
A reading above 50 indicates growth, while anything below signals a contraction.
OCBC economist Selena Ling noted that the poorer output had been caused by weaker demand both at home and abroad.
"The main drag was from new orders, which slumped 3.7 points to 49.6 in December, accompanied by slower new export orders," she said.
CIMB economist Song Seng Wun said the slide in overall new orders was the biggest decline since the 2008-2009 recession. Backlog orders also fell for the third straight month to a one-year low and inventory dropped to its lowest level since November 2011, he noted.
"While customers could be cautious about demand in the coming months, they could also be watching the rout in international energy prices, are delaying bookings and depleting inventories in anticipation that raw material costs will follow suit."
This is especially likely to be the case for those in the chemical manufacturing industries, he said.
Singapore's shrinking manufacturing output is simply a reflection of a weaker global economy, Ms Ling said. The data is in line with the recent sluggish manufacturing PMI signals from the rest of the world.
For instance, euro zone output, new orders and employment have all recorded sluggish growth and the pace of manufacturing growth slowed more than expected in the United States in December too.
In Asia, China's official PMI slipped to 50.1 last month, its lowest level of the year, while Indonesia's PMI fell into contractionary mode with a reading of 47.6, the lowest since the survey began in April 2011.
Export order growth has also decelerated sharply in Japan, Vietnam and Taiwan with a continued contraction in South Korea.