Based on advance estimates from the Ministry of Trade and Industry, the manufacturing sector in Singapore grew by 2.5% on a year-on-year basis in the second quarter, slower than the 8.2% growth in the previous quarter. Growth during the quarter was primarily due to a surge in output in the biomedical manufacturing cluster. On the other hand, weak external demand and workplace disruptions during the CB period weighed on output in the chemicals, transport engineering and general manufacturing clusters.
According to the Singapore Institute of Purchasing and Materials Management (SIPMM), the June reading of the Singapore Purchasing Managers’ Index (PMI) was 48.0. This marks an increase of 1.2 points from 46.8 in May. The manufacturing sentiment in Singapore picked up as the “circuit breaker” restrictions were progressively eased, enabling more factory operations.
However, Singapore’s June PMI data marked the fifth month of contraction for the overall manufacturing sector. Although some key indicators, including new orders, new exports, factory output, employment, and supplier deliveries have picked up for a second month in a row, they are still also in contraction territory. June also marked the fifth month of contraction for the electronics sector, whose PMI recorded an increase of 1.4 points from the previous month to post a slower contraction at 47.6. This was affected by the declining global demand arising from the pandemic controls and trade disputes of the major economies, however globally, more economies have reopened, hence supply chain disruptions are likely to be easing with time as well.
Across Asia, PMI readings have been mixed, with China, Malaysia, and Vietnam back in expansion territory whereas other economies remain in contraction territory despite some recent improvements.
(Sources: Ministry of Trade and Industry, Singapore; Singapore Institute of Purchasing and Materials Management; The Straits Times)