S’pore factory activity expands in July on AI boom, but supply chain crisis brews due to Iran war
The electronics sector marked its 14th consecutive month of growth.
Singapore's manufacturing sector experienced steady growth in July, with factory activity expanding for the 12th consecutive month, driven by artificial intelligence (AI) demand. However, a supply chain crisis emerged due to tensions in the Middle East, escalating input prices and causing severe supply chain disruptions. The purchasing managers' index (PMI) for manufacturing rose to 51.4 points in July, signaling growth.
The electronics sector, comprising 40% of the Republic's manufacturing output, also saw a PMI increase to 52.4 points. Despite these positive signs, the supplier deliveries index contracted for the seventh consecutive month, reflecting prolonged lead times and supply chain constraints. The ongoing conflict between the US and Iran, which blocked the Strait of Hormuz vital for global shipping, has contributed to the supply chain crisis.
Although the US President and Iran agreed to resume talks, the situation remains volatile and impacts various aspects of the economy, including petrochemical feedstock, transport logistics, and insurance premiums.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
