Singapore’s manufacturing PMI index rises again in January, GDP likely to grow 1 pct-2 pct in 2017

Singapore’s electronics and manufacturing PMI rose again in January. The manufacturing PMI rose 0.4 points to 51, while electronics PMI rose 0.6 points to 51.8. New orders index, production index and export orders all saw improvements. This follows the robust momentum witnessed in the December industrial production and NODX data, and also tallies with the moderate rebound witnessed in the recent business expectations survey where 2 percent of manufacturers were positive about the first half of 2017 outlook.

This is primarily led by electronics whereas the general manufacturing and infocomms and consumer electronics clusters were pessimistic. These augur well for the first quarter momentum. The PMI scenario throughout Asia was quite muted, with rebounds seen in Indonesia, India and Myanmar. It was flat in Thailand and weaker in South Korea and Philippines.

Given that industrial production in Singapore came in strong at 21.3 percent, the manufacturing growth in the fourth quarter is expected to have come in at 11.5 percent, as compared with the flash figure of 6.8 percent. The fourth quarter GDP growth is expected to have come in at 2.3 percent year-on-year, as compared with the flash print of 1.8 percent growth. Meanwhile, the economic growth for the whole of 2016 is likely to have come in at 2 percent year-on-year, noted OCBC Bank.

“We maintain our 2017 GDP growth forecast at 1-2 percent for now, given US and China economic policy uncertainties”, added OCBC Bank.