Singapore's manufacturing PMI hits 33-month high

Last month's reading is highest since Nov 2014, boosted by strong electronics sector

Factory activity rose for the 12th straight month in August, posting the highest reading since November 2014 as electronics production surged to its best showing in nearly seven years.

The purchasing managers' index (PMI) - an early indicator of manufacturing activity - posted a reading of 51.8 last month, up 0.8 point from July's reading of 51.

A reading above 50 points to growth in the sector, while one below 50 indicates contraction. Almost all indicators showed signs of improvement. New orders, new exports, factory output and inventory levels all expanded at a faster pace.

Manufacturing employment contracted at a slower rate, posting a reading of 49.8 last month, from 49.3 in July, said the Singapore Institute of Purchasing and Materials Management (SIPMM), which compiles the PMI. "The latest readings indicated sustained growth in the manufacturing sector since August last year," it added.

The electronics cluster's PMI posted a healthy reading of 53.2 last month, rising by one full point from July's reading of 52.2. This is the highest recorded reading since November 2010.

A manufacturing director of a firm that produces machines for electronics assembly told The Straits Times yesterday that orders from mobile phone makers have picked up and the rise in activity should be sustained till the end of next month at least.

The brighter data here mirrored the rest of the region, said OCBC economist Selena Ling. Taiwan, Vietnam, mainland China, India, Indonesia and Malaysia all posted higher PMI readings last month, although Japan, the Philippines and Thailand recorded declines.

Ms Ling said: "Global semiconductor companies have generally benefited from healthy demand for consumer electronics, data centre activities fuelled by cloud demand, as well as the gearing up for the iPhone 8 production cycle." Companies also benefit from consumers' demands to upgrade to mid- to high-end smartphones and other large-screen phablets, she said.

DBS economist Irvin Seah said: "The real test will come towards the end of the year and the lull in the beginning of next year. But between then and now, it's 'celebration time' for manufacturers."

51.8 - The purchasing managers' index (PMI) for factory activity last month, up 0.8 point from July's 51.

49.8 - The manufacturing employment PMI last month, showing it contracted at a slower rate than July's 49.3.

53.2 - The electronics cluster's PMI reading last month, rising by one full point from July's reading of 52.2. This is the highest recorded reading since November 2010.