SINGAPORE -Factory activity rose for the sixth straight month in February, though at a slightly weaker pace as the manufacturing rebound turned out to be less of a broad-based recovery than was hoped for.
The Purchasing Managers' Index (PMI) - an early indicator of manufacturing activity - posted a reading of 50.9 in February, down from January's reading of 51.
A reading below 50 indicates contraction, while one above 50 points to growth.
The less expansionary reading was due to a slower rate of expansion in factory output, new orders, new exports, and lower imports, said the Singapore Institute of Purchasing and Materials Management, which compiles the PMI.
The bright spot was manufacturing employment, which continued to expand marginally, rising to a reading of 50.3 in February, from 50.2 in January. It had recorded contractions since November 2014.
The PMI for the electronics cluster posted a reading of 51.4, down from January's 51.8.
"Nevertheless, the softer February data has to be seen in the context of the January readings, which were the highest since November 2014 (for overall manufacturing PMI) and October 2014 (for electronics PMI)," said OCBC economist Selena Ling.
The February pullback did not come as a surprise. Expectations had been tempered after January's official industrial production data disappointed last week.
Figures from the Economic Development Board showed that manufacturing output rose 2.2 per cent in January from the same month a year ago, much lower than the 9.5 per cent expansion tipped by economists.
This was due to a 18.3 per cent contraction in drug production in January, which offset a 14.8 per cent expansion in electronics production.
"It was clear that the manufacturing recovery was not yet running on broad-based engines," Ms Ling said.