Manufacturing activity in Singapore fell in February as orders weakened, resuming a downturn that started in July last year even as factories in the United States and South Korea reported improving conditions. The Southeast Asian city-state's Purchasing Managers' index (PMI) fell to 49.4 points last month from 50.2 points in January, dropping below the key 50-point level that separates expansion from contraction for the seventh time in eight months, the Singapore Institute of Purchasing & Materials Management (SIPMM) said on Monday.
The drop in Singapore's manufacturing PMI contrasts sharply with South Korea, where manufacturing activity expanded in February at the strongest rate in nine months, according to a PMI compiled by HSBC and Markit. US manufacturing activity expanded last month at its fastest clip in 20 months but some Asian factories slowed and European output fell, suggesting the road back to robust global growth remains uneven.
"The dip in the overall PMI was attributed to lower levels in new orders and a first-time contraction in new export orders," SIPMM said in a statement. "Whilst inventory and input prices continued to expand and posted higher readings, stockholdings of finished goods and employment reverted to contraction after having expanded in the previous month," the institute added.
A separate PMI for Singapore's electronics sector improved, however, rising to 52.1 points from 49.9 points in December on the back of new orders from domestic and overseas markets, SIPMM said. Singapore, whose trade is around three times GDP, has been badly hit by the weakness in Western economies that has crimped demand for many of its exports. Its electronics manufacturers have also not been as successful in tapping surging demand for smartphones as their rivals in South Korea and Taiwan, although investment in the sector remained healthy.
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