Singapore: Manufacturing sector keeps improving – UOB

Economist at UOB Group Barnabas Gan assessed the recent performance of the manufacturing sector in Singapore.

Key Quotes

“Singapore’s manufacturing PMI reported by SIPMM registered a smaller rate of expansion in August 2020 at 50.1, compared to 50.2 in the previous month.”

“The latest PMI data still reflects a relatively rosier economic backdrop, compared to the contraction periods between February and June 2020, when the indices were below the 50.0 mark. Sub-sector data also point to improvements in Singapore’s industrial production and electronic exports environment.”

“Despite the expansion seen in the manufacturing PMI, whole economy PMI print from IHS Markit continued to fall in August 2020, suggesting that much of the decline is potentially due to Singapore’s construction and services (including retail) sectors.”

“Nonetheless, the expansions in both manufacturing and electronic PMIs signal that a recovery is taking place, and overall GDP is expected to improve relative to the 13.2% y/y contraction in the second quarter of this year. We maintain our view that the trough in Singapore’s economic performance is seen in 2Q20.”