Published March 4, 2009

Manufacturing shrinks for 6th straight month

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THE manufacturing sector shrank for a sixth straight month in February, according to the latest Purchasing Managers' Index (PMI) released yesterday by the Singapore Institute of Purchasing and Materials Management (SIPMM). The PMI reading was 45 - the same as in January. Readings above 50 generally imply expansion, while those below 50 imply contraction.

Related links: Click here for the March issue of SIPMM Business Bulletin Electronics Industry PMI

All indicators showed contractions except the overall supplier deliveries index, which has been in positive territory since September last year. SIPMM executive director Janice Ong said the latest figures suggest the near-term outlook remains poor. 'It appears that local manufacturers have to continue to brace themselves for a tougher journey as the PMI and electronics sector indices may not move into positive territory so soon,' she said.

The electronics sector contracted for the fifth month in a row in February, with a reading of 43.8, though this was 0.2 points up from January. Stocks of finished goods contracted, while electronics new orders remained in the red.

'It may not be possible for the PMI to return to expansion, perhaps within the next few months,' Ms Ong said. 'What we can hope for is a possible turnaround in new export orders for the overall manufacturing economy, in particular from countries such as the US, Japan and Europe.'