Singapore factory growth slows in October as manufacturing PMI dips to 51.4

Singapore's manufacturing activity expanded for the 15th consecutive month in October, but at a slower pace compared to previous months. The Purchasing Managers' Index (PMI) for the manufacturing sector fell to 51.4, indicating expansion but at a decelerating rate. The electronics sub-sector, which has been a major driver of growth, saw a slight decline in its PMI from 52.5 to 52.5, suggesting a slowdown in expansion.

Stephen Poh, executive director of the Singapore Institute of Purchasing and Materials Management (SIPMM), noted that this drop should not be viewed as a loss of momentum, but rather as a cooling from a high base. October's slowdown was attributed to reduced growth in new orders, factory output, input inventories, employment, imports, and order backlogs.

Despite these challenges, strong exports, AI-linked orders, and elevated backlogs continue to support electronics growth. However, higher input costs and potential disruptions in global shipping remain concerns. Economists expect Singapore's manufacturing sector to remain resilient in the near term, driven by strong external demand for AI-related hardware.

Similar trends are observed in other Asian countries, with Indonesia, Thailand, and South Korea reporting stronger growth, while China and Taiwan experience slowdowns.