The Purchasing Managers' Index came in at 44.7 for April 2020. (Photo: straitstimes.com)
Singapore (VNA) – The Purchasing Managers' Index (PMI) that gauges manufacturingconditions in Singapore slumped to an 11-year low in April, as firms struggledwith order cancellations as a result of global coronavirus containment measures.
The index camein at 44.7 for the month, down 0.7 point from March's 45.4 reading, making the third straightmonth of contraction.
It is also thelowest reading since November 2008 during the global financial crisis,according to data released on May 4 by the Singapore Institute of Purchasingand Materials Management (SIPMM).
Theelectronics PMI declined 1.3 points to 42.8 in April, compared with 44.1 the previousmonth. It is the lowest reading since December 2008, when the electronicssector index fell to 41.8.
April'soverall and electronics PMI readings were weighed down by faster contractionsin new orders, new exports and factory output, the SIPMM said.
However, slower contractions were recorded for employment, inventoryand supplier deliveries for the overall manufacturing sector. The indexes offinished goods, input prices, and order backlog also recorded shrank at aslower pace.
DBS Banksenior economist Irvin Seah said that April's continued PMI slide was not asurprise, given that readings in March had already fallen to an 11-year low.
"Thereadings were expected to be weaker due to the circuit breaker measures, whichnaturally would affect manufacturing companies," he was quoted by the Straits Times as saying.
He noted thatsome clusters such as biomedical manufacturing are doing well amid thecoronavirus pandemic and helping to offset the decline in other clusters.
The economistsalso noted the continued contraction in the employment index, as this could signal retrenchments ahead.
OCBC head oftreasury research and strategy Selena Ling said the slump in the employmentgauge for both the overall and electronics PMIs, heralds impending softness forthe domestic labour market.
Seah said thatthe second quarter of the year could possibly see the bottoming out of themanufacturing downturn, with a gradual recovery to follow in the second half ofthe year, depending mainly on how much Singapore eases off on circuit breakermeasures./.
