[SINGAPORE] Factory activity in Singapore grew more slowly in March, amid rising global trade tensions and tariff uncertainties.
The Purchasing Managers’ Index (PMI) declined to 50.6, down 0.1 point from February, data from the Singapore Institute of Purchasing and Materials Management (SIPMM) showed on Wednesday (Apr 2).
Still, this was the 19th straight month of expansion. A reading above 50 indicates expansion, and one below 50, decline.
Within manufacturing, the PMI for the lynchpin electronics sector likewise slipped by 0.1 point to 50.9, marking the 17th consecutive month of expansion.
SIPMM executive director Stephen Poh said: “Growth in the manufacturing sector has remained on the expansion track since August 2023, but there have been increasing concerns about the sustainability of growth.”
He added: “Global trade risks have heightened due to ongoing geopolitical and trade tensions.”
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Both the overall PMI and the electronics PMI expanded more slowly in new orders, new exports, factory output and employment.
OCBC chief economist Selena Ling said the modest dip in both PMIs was unsurprising, given escalating tariff uncertainties ahead of US President Donald Trump’s “Liberation Day” announcements on Apr 2, after which other countries may impose reciprocal tariffs.
“While the expansion is likely to sustain in the coming months, there are likely choppier days ahead,” she said.
UOB economist Jester Koh said sector-specific US tariffs – particularly on pharmaceuticals, semiconductors and cars – could weigh on Singapore’s manufacturing sector if implemented. Car tariffs, for instance, could weaken demand for automotive chips and semiconductor assembly and testing work.
DBS economist Chua Han Teng said: “Singapore’s small and open economy remains highly indirectly vulnerable to a potential global economic slowdown induced by rising global protectionism, even as it faces limited direct US tariff risks.”
Within the overall PMI, input prices contracted for the second straight month, he noted. This implies easing manufacturing input costs, with disinflationary risks possibly rising if global demand weakens.
Regional trends
The regional picture was mixed, with continued expansion in some markets but contraction in others.
China’s official PMI rose to 50.5 in March – a 12-month high – from 50.2 a month prior.
China’s Caixin PMI, which tracks smaller private manufacturers, rose to a four-month high of 51.2 in March, in its sixth straight month of expansion.
Barclays economists Zhou Yingke, Zhang Ying and Chang Jian noted that the rise in China’s official PMI slightly exceeded the expectations of both the market and the banks.
But two straight months of improvement in new export orders appear inconsistent with declining exports and heightened US trade tensions.
“Looking ahead, we remain sceptical of any sustained and visible recovery in domestic demand, including consumption,” they wrote.
Indonesia’s PMI stayed in expansion, but dipped to 52.4 from 53.6 before.
Thailand’s PMI slipped into contraction territory, falling 0.7 point to 49.9; Malaysia’s stayed in contraction mode, dropping 0.9 point to 48.8.
