Singapore PMIs for Jan15 have indeed gotten worse. In the month the headline manufacturing PMI dipped by 0.5pt to 49.0. Electronics PMI also fell, to 48.5, down from 48.9 in the previous month. All key sub-indexes are pointing to more challenging times ahead.
Reflecting manufacturers' anticipation of weaker demand ahead, new orders (including export orders) and employment indexes were unanimously down. Although there were upticks on inventory and stocks of finished goods, these are also reinforcing the dire market conditions given that inventory stocks were not translated into sales.
The PMIs of most key markets have remained stuck in the contraction territory while the US SEMI book-to-bill ratio is reflecting a down-cycle in the electronics industry. The global demand remains weak amid a challenging external environment. Such phenomenon has already been manifested in disappointing export and industrial production figures.
Although historically manufacturers will front-load their orders ahead of the Lunar New Year, chance is high than this festive season will be a relatively quiet one. The cold spell that hit many parts of Asia will likely dampen consumer spending as well as industrial activity. This will have a knock-on impact on Singapore's PMIs within these few months. Get ready for a cold winter.
