SINGAPORE - Manufacturing growth continued its steady slide in February - its sixth straight month of decline - with the electronics sector heading south again.
This is according to Monday's (March 4) release of the latest Purchasing Managers' Index (PMI), a leading indicator of economic activity.
The overall manufacturing PMI was 50.4 last month, down from January's 50.7 and the lowest reading since the 50.2 recorded in November 2016.
February still marked the 30th straight month of expansion, indicated by the reading of 50 or more on the survey-based index.
OCBC Bank head of treasury research and strategy Selena Ling said the easing PMI was not unexpected given regional softness and the Chinese New Year holiday in early February.
The latest figures have prompted her to lower her forecast for first-quarter manufacturing to a 0.5 per cent contraction year on year.
Her full-year GDP growth forecast is now 2.3 per cent, down from an earlier 2.7 per cent prediction.
The Singapore Institute of Purchasing and Materials Management, which compiles the PMI data, attributed the lower reading to slower growth in new orders and exports, factory output and employment levels.
The electronics sector's PMI remained in contraction for the fourth straight month, edging down 0.1 point in February to 49.5.
New orders, new exports and employment stayed in contraction for a second month, while factory output declined for the third month in a row, and order backlog saw its 10th straight month of contraction.
Ms Ling said the weakness in the underlying indicators "suggests that the soft patch in electronics is likely to be sustained for the next few months and it is too early to call for a turnaround in this sector".
Singapore's February showing was part of a mixed Asean picture, with Nikkei manufacturing PMI figures showing Thailand and Malaysia in decline, but Myanmar, the Philippines, Vietnam and Indonesia in expansion.
The Caixin China general manufacturing PMI recovered from January's recent low to hit 49.9 in February, signalling broadly stable operating conditions.