Growth in Singapore's private sector picked up last month although lower employment persisted, according to the latest Nikkei PMI survey released yesterday.
The headline Nikkei Singapore Purchasing Managers' Index (PMI) rose to 51.3 last month from 50.7 in June. A reading above 50 points to growth, while one below 50 indicates contraction.
Last month's reading continued the expansionary trend already spanning over a year, but at a pace that is below the average seen so far this year. This was despite new export sales increasing at the strongest pace since the survey started nearly five years ago, buoyed by demand from China and Japan.
So, it was foreign demand that provided support to businesses here, whereas the domestic market was less active.
Mr Bernard Aw, economist at IHS Markit, which compiles the survey, said: "Private-sector businesses were generally less confident about the 12-month outlook compared with June, expressing concerns for the slowing in some industries such as real estate.
"Forward-looking indicators suggest that a further upturn is far from guaranteed."
Growth here has not been broad-based, added Mr Aw, relying instead on the upturn of a few cyclical sectors such as electronics to drive the recent strong expansions.
The survey also noted that firms here did not boost staff numbers despite the output growth last month.
"On the contrary, lower employment was observed for a second straight month, albeit only marginally. Anecdotal evidence suggested reduced part-time hiring," the survey said.
The Nikkei Singapore PMI polls more than 400 private-sector firms, which have been selected to represent the structure of the Singapore economy. These include companies in manufacturing, services, construction and retail.
A separate PMI for Singapore manufacturing released on Wednesday showed that the sector expanded for the 11th straight month in July, but that growth may be peaking.