Singapore March Manufacturing PMI Indicates Expansion But at Slower Pace

By Amanda Lee

SINGAPORE--A key gauge of Singapore's manufacturing activity expanded for the eighth consecutive month in March, albeit at a slower pace amid the Middle East conflict.

The purchasing managers index compiled by the Singapore Institute of Purchasing and Materials Management edged down to 50.5 last month from 50.6 in February. A reading above 50 indicates expansion, while one below signals contraction.

The reading showed a slower expansion in new orders, new exports, factory output and employment, SIPMM said Thursday.

"It is encouraging to note that the latest PMI readings continue to reflect a positive outlook for the overall manufacturing sector, despite heightened geopolitical uncertainties arising from the U.S.-Iran conflict," said Stephen Poh, executive director at SIPMM.

The PMI for electronics, which accounts for about one-third of Singapore's manufacturing output, edged up to 51.4 in March from 51.3 in February, thanks to a faster expansion in new orders, new exports, factory output, input purchases and employment.

The electronics sector remains a key driver of the latest PMI's expansion, driven by strong global demand for semiconductors, artificial-intelligence hardware, and data center components, Poh said.

Singapore's small, open economy makes it vulnerable to external shocks, such as the conflict, which has threatened supply chain disruptions.

The city-state's growth and trade are expected to weaken if the Middle East tensions continue throughout the first half of this year, RHB Bank's Barnabas Gan said in a recent report.

Higher global oil prices are likely to weigh on Singapore's trade balance, as it would raise input and energy costs for firms, especially in manufacturing, transport and petrochemical, Gan added.

Write to Amanda Lee at [e-mail]

(END) Dow Jones Newswires

04-02-26 0914ET