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Singapore factory activity increases for 4 straight months in Dec

Singapore factory activity increases for 4 straight months in Dec

SINGAPORE: The activity of factories in Singapore showed expansion for the fourth straight month in December, caused by increases in inventory holdings, new orders and new exports.

Economists expect the upward momentum to continue, at least for the first six months of the year, boosted by a pick-up in activity in key Asian manufacturing hubs as external demand improves.

The Singapore Institute of Purchasing and Materials Management (SIPMM) Purchasing Managers’ Index (PMI) data yesterday (3 Jan) showed a rise of 0.4 point from the previous month to 50.6 in December, above the 50-point mark that separates expansion and contraction. The production sub-index jumped 0.8 point to 51.1, the new export orders measure rose 0.3 point to 50.7, the measure for new orders up 0.2 point to 50.9, and inventory also increased 0.2 point to 51.0.

TODAY reported the United Overseas Bank’s economist, Francis Tan saying, “We do not see this performance from the manufacturing sector as a one-to-two-month wonder. The overall PMI was led by the electronics portion. The demand growth for semi-conductors under electronics looks to be sustained. So there is no slowdown for the overall PMI at least for the first half of this year. Now the only thing is to hope for positive spillover to other sub-sectors such as business services.”

The electronics sub-index which comprises about one-third to the country’s manufacturing performance continued to expand for the fourth successive month, rising 0.7 point from the previous month to 51.2 in December. Manufacturing contributes about one fifth of the Singapore economy.

Last month data from the Economic Development Board showed Singapore’s manufacturing output rose 11.9 percent year-on-year in November 2016, sharply increase from 1.2 percent in October.