Singaporean manufacturing and electronics PMI indices rebound modestly in March; however, electronics PMI index remains in contractionary territory. The manufacturing PMI index rose 0.4 points to 50.8, whereas the electronics PMI index rose 0.3 points to 49.8. This reinforces the tentative economic green shoots seen earlier in the China PMIs and U.S. manufacturing ISM data.
The gains were recorded mainly in new orders, new exports and factory output gauges, which were encouraging, but the order backlog indices still continued to contract, which implied that the external demand story is not entirely out of the woods yet, noted Selena Ling, Head of Treasury Research & Strategy, OCBC Bank.
Pending a convincing resolution of the U.S.-China trade talks, these initial signs might be seen as suggestive of spring after a harsh winter, especially coming from February which was a low base because of the Chinese New Year festive season. Nevertheless, barring further signs of pickup in both business and consumer sentiment, it is still difficult to see manufacturing or electronics emerging as the main growth driver for the first half growth of the Singaporean economy at this juncture.
“We see 1Q19 GDP growth at a relatively lacklustre 1.8 percent yoy amid a tepid manufacturing performance”, added Selena Ling.
