A key indicator of Singapore's manufacturing activity remained in growth for the 12th consecutive month in August, signaling a positive momentum for the country's economic development.

A PMI value above 50 indicates expansion in the manufacturing economy, while a value below 50 indicates contraction.

According to the latest data released on the 4th, the seasonally adjusted PMI for Singapore’s private sector in August was 57.6, up from 57.2 in July, reaching its highest level since August 2021. This marks 18 consecutive months of improvement in the conditions of Singapore’s private sector.

Source: S&P Global PMI

In August, factory output in Singapore improved across all sectors, with electronics production reaching its highest level in six years and overall manufacturing activity hitting its best level in over three years.

The Singapore Institute of Purchasing and Materials Management (SIPMM) reported on September 2 that the PMI for the manufacturing sector rose to 50.9 in August, up from 50.7 the previous month. Meanwhile, the PMI for the critical electronics manufacturing sector increased from 51.0 to 51.3.

New Business Inflows

SIPMM stated on Monday that the growth in August was driven by faster expansion in key indices such as new orders, new exports, and factory output. The electronics manufacturing PMI, which represents about one-third of Singapore’s manufacturing activity, rose from 51.0 in July to 51.3 in August, marking its tenth consecutive month of expansion and reaching its highest level since September 2018.

Continued Manufacturing Recovery

Stephen Poh, Executive Director of SIPMM, indicated that the latest PMI data suggest a steady recovery in manufacturing, supported by demand for consumer electronics as well as AI memory and network chips. Poh added, “Despite recent weakness in most major economies and ongoing uncertainties in the macroeconomic environment and geopolitical developments, local manufacturers remain optimistic about the sector.” The real estate and commercial services sectors saw the most rapid growth in new business activity, highlighting a robust growth environment. However, challenges persist as transportation and supply constraints negatively impact supplier performance. Rising transportation costs, continued supply issues, and increased input material prices led to higher procurement costs last month.

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