Singaporean manufacturing PMI falls further in May, economy likely to expand 3.8 pct in Q2

Singaporean manufacturing PMI fell further in the month of May by 0.2 points to 52.7. Meanwhile, electronics sector PMI rose slightly by 0.1 point to 52.3 in the same month. The latest manufacturing PMI reading came above its 50 mark for the 21st straight month, though marking a slowdown for the second month.

In spite of the deceleration, the expansionary manufacturing PMI print implies that whole some signs of caution could still be felt to date, the manufacturing momentum continues to be intact and is probably not facing a sharp moderation. Across the sub-categories in the manufacturing PMI sector, stocks of finished goods and input prices rose, while slower growth in manufacturing output, imports, exports and inventory were recorded. However, the electronics PMI paints a rosier picture with exports, new orders and output performing relatively better, noted Barnabas Gan, Economist, OCBC Bank.

The PMI performance of Singapore is also largely consistent with regional manufacturing PMI performance, which also were softer-neutral in May.

“Looking forward, we keep our manufacturing and GDP to print around 6.3 percent and 3.8 percent y/y respectively with upside risk in 2Q18, while full-year manufacturing and GDP growth momentum should be around 4.5 percent and 3.0 percent respectively” added Barnabas Gan.

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