SINGAPORE Feb 5 Manufacturing activity in
Singapore expanded in January as new orders and new export
orders grew, reversing from a contraction in December, an
industry survey showed on Wednesday, despite slower growth in
the U.S. and Chinese factory sectors.
The Singapore Institute of Purchasing & Materials
Management's Purchasing Managers' index (PMI) rose to 50.5 last
month from 49.7 in December, when the manufacturing sector
contracted for the first time in 10 months.
A reading above 50 indicates that manufacturing sector
activity is generally expanding, while levels below that point
to a contraction.
"The electronics sector continued to expand for the 12th
consecutive month. The readings indicated further growth in new
orders from domestic and overseas markets," the institute said
in a statement.
Singapore's PMI got a lift in January partly because some
factory orders were diverted to Singapore due to the political
turmoil in Thailand, said Janice Ong, executive director for the
Singapore Institute of Purchasing & Materials Management.
"We cannot generalize but when we speak to some of the
respondents, they do mention that," Ong said. She added that the
electronics sector gained a boost but declined to go into
specifics, citing confidentiality reasons.
The institute's PMI for the electronics sector advanced to
52.0 from December's 50.1.
The political risk may have led to some shift in production
away from Thailand to Singapore, said Daniel Wilson, an
economist for ANZ in Singapore.
"Even though it's likely cheaper to produce there, the
political risk premium may be bringing costs closer together,"
"I haven't heard of spillovers into Singapore yet, but it
doesn't altogether surprise me because the political unrest has
been going on for roughly three months now," Wilson added.
To be sure, some economists were sceptical that any
diverting of factory orders to Singapore from Thailand would
have a major impact on Singapore's manufacturing sector as a
"My personal feel is that the structure of the manufacturing
sector in Singapore and Thailand is quite different," said
Francis Tan, an economist for United Overseas Bank.
Manufacturers with a presence in Thailand said they were
unaffected by the political turmoil in the country.
"We have not seen drop in orders in the past three
months. We are doing okay and we normally get buying orders six
months in advance," Pissamai Saibua, Chief Financial Officer of
Thai electronics maker SVI Pcl, told Reuters.
Lotus Tan, a Singapore-based spokeswoman for hard-disk drive
maker Seagate Technology Plc, also said the company's
Thai operations were unaffected.
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