Singapore's manufacturing shrank for the first time in 10 months in July as companies received fewer orders and kept lower levels of inventory, the Singapore Institute of Purchasing & Materials Management said on Tuesday. The institute's July Purchasing Managers' Index (PMI) fell to 49.3 points from June's 50.4 points, with the sub-indexes for new orders, new export orders and stocks of finished goods index falling further into negative territory.
A reading above 50 in the PMI indicates manufacturing activity is expanding while a reading below that level shows a contraction. The inventory sub-index declined but remained above the 50 point level while the employment sub-index turned negative. A separate PMI for Singapore's electronics sector fell to 49.5 points from June's 50.9 after eight months of expansion due to fewer orders.
The weakness in Singapore's PMI readings come amid signs of a slowdown in global manufacturing, with the United States, Europe and China reporting weaker production activity this week. On Monday, the US Institute for Supply Management manufacturing report fell to 50.9 in July, which was its lowest level in two years. The eurozone manufacturing PMI registered its worst reading since September 2009, while China's official government PMI dropped to its weakest in more than two years.