Singapore (Commonwealth Union)_In September, overall industrial activity in Singapore shrank for the first time in two years, mirroring a decline in manufacturing mood throughout the region as a result of sluggish demand and ongoing price pressures.
According to the Singapore Institute of Purchasing and Materials Management (SIPMM), Singapore’s Purchasing Managers’ Index (PMI) shrank for the first time in September following 26 consecutive months of growth, falling 0.1 points to 49.9. (Oct 3). A number more than 50 shows an increase over the previous month, while one less than 50 implies a contraction. Similarly, the crucial electronics industry shrank for the second consecutive month in September, falling 0.2 points to 49.4. Since last year, a slowing electronics cycle has had an impact on the overall index.
The picture is getting worse as the U.S.-China trade conflict intensifies and President Donald Trump threatens to impose additional taxes on nations like Mexico, endangering the world economy. Singapore’s results are consistent with the broader trend in Asia, with PMI surveys released on Monday suggesting a new decline in export giants South Korea and Japan.
The third quarter of manufacturing as a whole “finished with a small decline, amid persistent contraction in the electronics sector,” according to Sophia Poh, vice president of industry engagement and development at SIPMM. It was hampered by a deeper reduction in the important indices of new orders, new exports, and manufacturing production, as well as a drop in the employment index following 22 months of uninterrupted growth.
According to Poh, “global markets are still coping with the macroeconomic dangers of rising inflation and qualitative tightness, as well as the geopolitical concerns of the protracted Russo-Ukrainian war.” Nevertheless, when global demand cycles began to shift in September, the supplier delivery indices for both manufacturing and electronics improved, although input indices continued to decline, according to OCBC Chief Economist Selena Ling. As major central banks continue to be hawkish in the interim to bolster their reputations for battling inflation, growing worries of a global recession are likely to undermine consumer and corporate confidence.
