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SINGAPORE: Singapore’s manufacturing activity in October expanded at its fastest pace since March last year, as demand continued to improve amid the COVID-19 crisis, underscoring a steady recovery for the overall manufacturing sector .
The Purchasing Managers Index (PMI) rose 0.2 points from the previous month to 50.5 in October, marking the fourth consecutive month of expansion and the highest reading since March 2019, according to data from the Institute of Purchasing and Management of Materials of Singapore (SIPMM). on Tuesday (November 3).
A PMI reading above 50 indicates that the manufacturing economy is generally expanding, while one below that level points to a contraction.
“The October PMI reading is an affirmation of the recovery in the overall manufacturing sector,” said Ms Sophia Poh, Vice President of Industry Engagement and Development at SIPMM.
The October reading was driven by new orders, new exports and industrial production. However, overall employment continued to contract for the ninth consecutive month, albeit at a slower pace.
READ: Singapore’s Unemployment Rate Rises to 3.6%; more than 20,000 layoffs to date
Similarly, the supplier delivery index also experienced a slower rate of contraction, while finished goods, imports, input prices, and the order book posted slightly faster growth rates.
The PMI for the electronics sector rose 0.1 points from the previous month to 51 in October, the third month of the sector’s expansion and the highest reading since September 2018.
Ms Selena Ling, head of treasury research and strategy at OCBC Bank, said October’s improvement was not “surprising as this is the run-up to the busiest period before the Christmas ordering season.”
He added that the readings are an affirmation that the manufacturing sector “remains in the driver’s seat” of the Singapore economy and will likely outperform the services and construction sectors this year.
Like many countries, Singapore’s economy has been hit by the COVID-19 pandemic, although recent data has shown a gradual recovery.
READ: Singapore’s Q3 GDP contracts at a slower pace of 7% after the economy gradually reopens after the circuit breaker
READ: Singapore’s industrial production increases 24.2% in September thanks to strong pharmaceutical production
However, concerns about geopolitical developments persist, said Poh of SIPMM.
“Manufacturers are increasingly concerned about uncertain geopolitical developments, as well as the new waves of the global pandemic, which could slow down global demand and thus derail the recovery in manufacturing,” he said.
