SINGAPORE’S overall factory activity dipped in February, even as manufacturing sentiment across the region improved.
The Purchasing Managers’ Index (PMI) dipped slightly to 50.7 in February, a 0.2 point decline from the previous month, indicated data from the Singapore Institute of Purchasing and Materials Management (SIPMM) released on Monday (Mar 3).
A PMI reading above 50 indicates growth from the previous month, while one below 50 points to a contraction.
The lynchpin electronics sector dipped by 0.1 point, posting a slower expansion at 51 and staying in expansion territory for the 16th consecutive month.
SIPMM executive director Stephen Poh noted that while this was the 18th straight month of expansion for the overall manufacturing sector, there have been concerns over slowing growth in the last few months.
“Global trade uncertainty persists, arising from heightened risks of ongoing geopolitical and trade tensions, and this could lead to costly supply chain disruptions,” he said.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
DBS economist Chua Han Teng said that while January’s moderation may be partly influenced by Chinese New Year festivities, February’s further easing “could reflect manufacturers’ concerns over an increasingly uncertain global landscape”.
More uncertainty over global trade policy arising from potential higher US tariffs on a broader list of US trading partners could exacerbate this vulnerability, he added.
Similarly, OCBC chief economist Selena Ling noted that with recent US economic indicators suggesting “some easing in growth momentum”, there could be a more challenging outlook for the global economy and demand for manufacturing as tariffs take effect.
“While Asean, including Singapore, may likely continue to benefit from any foreign direct investment diversification flows, the potential threat of tariffs remains the sword of Damocles.”
Most regional economies recorded improvements in February, with several returning to expansion territory.
China’s official manufacturing PMI bounced back to expansion mode in February, surpassing market forecasts to climb 1.1 points to 50.2.
Similarly, the Caixin PMI, derived from smaller private manufacturers, hit a three-month high. It gained 0.7 point to 50.8 in February, marking the fifth straight month of improving manufacturing sector conditions.
Caixin Insight Group senior economist Wang Zhe said: “Overall, February saw faster growth in manufacturing supply and demand, a rebound in new export orders, increased corporate purchasing, largely stable raw material inventories, and smooth logistics.”
He noted, however, that employment continued to shrink, while prices – especially output prices – remained subdued.
In Indonesia, the S&P Global Manufacturing PMI returned to expansion territory, gaining 1.7 points to 53.6 in February. Thailand’s S&P Global Manufacturing PMI followed the same trajectory, rising 1 point to 50.6.
Malaysia’s manufacturing PMI rose 1 point to 49.7 in February, though it remained in contraction territory. Coming in just below the 50 threshold, it signalled that the country’s business conditions were moving closer to stabilisation over the course of the month.
