Singapore (VNA) – Singapore's manufacturing activity expanded at a faster pace in June, supported by artificial intelligence (AI)-related tailwinds amid continued, but potentially easing, challenges posed by the ongoing conflict in the Middle East.
According to data released on July 2 by the Singapore Institute of Purchasing and Materials Management (SIPMM), the Purchasing Managers' Index (PMI) rose 0.3 point to 51.3, marking the 11th consecutive month of expansion and its highest reading since November 2018. A PMI reading above 50 indicates expansion, while a reading below 50 signals contraction.
Within manufacturing, the PMI for the electronics sector, the backbone of Singapore's manufacturing industry, also increased 0.3 point to 52.2, extending its growth streak to 13 consecutive months.
SIPMM said the AI-driven semiconductor super-cycle is supporting robust production, with strong order inflows and rising order backlogs while reducing finished goods inventories.
Meanwhile, the United Overseas Bank (UOB) said movements in the order backlog and finished goods inventory sub-indices reflect inventory drawdown in response to order demand, suggesting that electronics production is still not keeping pace with market demand.
According to the UOB, there remains considerable scope to improve capacity utilisation, which should support further growth in electronics manufacturing in the coming months as businesses are likely to continue reducing inventories.
UOB economists also noted that the PMI input price index declined in June, likely reflecting lower energy, fuel and other input costs as geopolitical tensions in the Middle East moderated./.
