Singaporean manufacturing PMIs rebounds in March

Manufacturing and electronics PMIs of Singapore rebounded in the month of March. Manufacturing PMI rose to 53, while the electronics PMI rose to 52.4, marking the 19th and 20th straight month of growth. The rebounds were mostly widespread throughout new orders, new export orders, output, inventory, imports and the order backlog gauges, with the exception of input process and employment. The optimism might probably be linked to the very solid outperformance of the industrial production data in the initial two months of 2018.

But this domestic PMI improvement also jumped the trend within Asian whose manufacturing PMIs had greatly weakened, except for Philippines and Myanmar. In particular, manufacturing PMIs retreated for Taiwan, Vietnam, China and Indonesia. Significantly, South Korea’s manufacturing PMIs dropped below the 50 handle to 49.1, while Thailand is also back below 50 handle. Malaysia also witnessed its second straight contraction at 49.5, which implies some downside risk to regional manufacturing momentum in the coming months.

“Our 1Q18 GDP growth forecast is 5.1 percent yoy (4.3 percent qoq saar), which already incorporates the stronger performance in the first two months of this year”, noted Selena Ling, Head of Treasury Research & Strategy, OCBC Bank.

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