Singapore factories pick up steam, buck regional trend

Singapore factories pick up steam, buck regional trend

A key indicator of factory activity here picked up pace last month, adding to signs that manufacturing is gathering steam in Singapore even as it falters elsewhere in the region.

Fuelled by a jump in new orders from domestic and overseas markets, the purchasing managers' index (PMI) expanded for the third straight month in May to hit a two-year high of 51.1.

This was up from 50.3 in April and well ahead of economists' expectations of a 50.5 result. Any reading above 50 signals growth in manufacturing, while one below 50 means a contraction.

"The latest PMI numbers further gel our expectations of the cyclical rebound in manufacturing," said UOB economist Francis Tan.

He said the positive figures follow other optimistic data in April, such as a 4.7 per cent rise in factory output levels from a year ago and an improvement in exports.

CIMB economist Song Seng Wun agreed that "a modest recovery may be under way" for the manufacturing sector, which makes up a fifth of the economy.

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