Singaporean manufacturing and electronics PMIs rebound in August

Singaporean manufacturing and electronics PMIs rebounded in the month of August. The manufacturing PMI rose 0.3 points to 52.6, while the electronics PMI rose by 0.4 points to 52. The overall manufacturing rise was mainly due to higher new orders, new export orders, output imports, input prices, employment and order backlog for the manufacturing sector.

The electronics PMI rise was linked to higher new orders, new export orders, output, imports, input prices, employment, deliveries and order backlogs. This implies that the domestic manufacturing momentum is withstanding the deterioration in the external economic environment because of the U.S.-Sino trade war comparatively well, and the widening of manufacturing drivers beyond electronics and pharmaceuticals, especially, in the run-up to the traditional Christmas season.

“Our manufacturing growth forecast for 3Q18 is 3.9 percent yoy, which is a moderation from the double-digit growth seen in 1H18. Still our full-year manufacturing growth forecast is at 7.0 percent yoy.  Even with services growth likely to sustain at 2+ percent yoy in 2H18, top-line GDP growth is tipped to ease from the 3.9 percent yoy seen in 2Q18 to around 2.3 percent yoy in 3Q18”, stated Selena Ling, head of Treasury Research & Strategy, OCBC Bank.