Singapore’s manufacturing activity grew for the 17th consecutive month in November, albeit easing from the levels seen in the previous month.
Data released by the Singapore Institute of Purchasing and Materials Management (SIPMM) showed that the republic’s Purchasing Manager’s Index (PMI) came in at 50.6, 0.2 points lower than the previous month’s 50.8 reading.
Meanwhile, the electronics PMI – a separate metric – dipped by 0.3 points to 50.8.
The PMI is a key barometer indicating a nation’s manufacturing activity. A number above 50 indicates an expansion in output, while that below 50 points to an industry shrinkage.
New orders fell to 51.1 points, from 51.3 points before, while overall new exports edged down by 0.1 points to 50.9. The output metric similarly, slipped by 0.1 points to 50.8. The employment reading dropped to 50.6 overall, from 50.8 before, and to 50.9 for electronics, from 51.2 in October.
SIPMM attributed the slower pace of expansion to a dampening in rising costs as well as fears that Omicron variant of Covid-19 could further strain global supply chains.
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This was no surprise to Selena Ling, chief economist at OCBC, for she had seen “the Delta resurgence also basically hit regional economies and add to supply-chain disruptions”.
Manufacturing sentiment across the Asean region has been seemingly disparate.
For instance, the IHS Markit Asean PMI reading fell to 52.3 points, from 53.6 in the previous month. This follows moderating growth in Singapore, Indonesia and Thailand. A further decline was mitigated by a pickup in the rate of expansion in Malaysia, Vietnam and the Philippines.
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Elsewhere in Asia, China’s official manufacturing PMI was back in the green with an expansion of 50.1 points, up from 49.2 in the month before.
However, the Caixin PMI – which captures data from smaller, private manufacturers – retreated to 49.9, from 50.6 before.
Oxford Economics analyst Priyanka Kishore noted that the data still reflects a further easing in supply-chain disruptions in many economies, especially in Southeast Asia”. This, she adds, will support the robust industrial output growth in Asia next year.
However, analysts at Barclays point out that the regional PMI surveys had been done even before the Omicron variant was even detected.
“So, the actual impact will be seen only in the December PMI report,” they muse.
“Under a worst-case scenario of governments reimposing lockdowns to stop the spread of Omicron, this could push back the timing of supply-chain normalisation and keep input price pressures elevated,” they add.
Cover image: file photo
