SINGAPORE - Singapore's private sector economy gathered further momentum at the start of the second quarter, according to a survey released on Thursday (May 4).
The headline Nikkei Singapore Purchasing Managers' Index (PMI) rose to 52.6 in April from 52.2 in March, the highest reading since November 2016.
Both output and new orders rose at quicker rates in April and remained key growth drivers. Notably, growth in export sales strengthened while business confidence improved further.
A separate survey on Tuesday that covers just the manufacturing sector showed that factory activity expanded for the eighth straight month in April, though the run of strong growth showed signs of easing.
The broader Nikkei PMI survey covers others sectors of the Singapore economy like services, construction and retail.
Mr Bernard Aw, economist at IHS Markit, which compiles the survey, said: "Singapore's private sector started the second quarter on a stronger growth footing, supported by expansions in output and new business. In particular, export sales strengthened further in April, building on a marginal rise in March. With the private sector economy gathering momentum, business confidence also improved further, contrasting with the pessimism seen earlier this year."
Mr Aw said firms stepped up hiring in response to greater demand but increased labour resources were insufficient to dial back the rising trend in backlog orders.
Cost increases remained elevated, mainly driven by higher prices for inputs and sustained wage inflation, the survey showed.
While firms raised selling prices modestly, anecdotal evidence suggests that greater competition has limited the extent to which businesses pass on higher costs to consumers, said Mr Aw.
"The squeeze on margins may affect future hiring and investment plans even if there were signs of building capacity," he said.