Singapore factory activity expands for 19th straight month

Saul Bowman
April 4, 2018

According to the widely-tracked Nikkei Manufacturing Purchasing Managers' Index (PMI) survey, growth in manufacturing activity continued at a low pace of 51 in March, down from 52.1 in the previous month of February.

Uncertainties in China's exports rose significantly after U.S. President Donald Trump on Thursday instructed U.S. Trade Representative Robert Lighthizer to propose tariffs on at least $50 billion in Chinese products following a seven-month investigation into the Asian nation's intellectual property practices.

However, Tan said after the poor performance indicated by the latest PMI data coupled with uncertainties concerning over the potential global trade war gives an indication that the growth in the manufacturing sector may moderate in the 2H18.

Backlogs of work at euro area manufacturers also increased during March, taking the current sequence of expansion to nearly three years.

Sentiment among euro area manufacturers regarding future output softened in March to a 15- month low but remained strongly positive overall.

He added: "Although the pace of output expansion ticked higher in March, which is especially encouraging given the heavy snowfall during the month, this was offset by slower increases in new orders and employment". There was some pressure on supply chains as average lead times continued to lengthen during March (the third month in a row). The PMI surveys give market players a better opportunity to assess the probability of a rate increase from the Bank of England. This is partly caused by the weaker Indonesian rupiah (against the USA dollar). "Indeed, amid a slower expected pace of recovery in consumer spending, IHS Markit marginally downgraded its real GDP forecast to 7.3 per cent for the fiscal year 2017-2018", Dodhia said.

In Turkey, manufacturing output and new orders have increased, and so have cost burdens. Over the month of March all six gained on the PMI scale.

Output rose for the 14th straight month in the face of "stronger underlying demand".

March data pointed to sustained pressure on operating capacity across the manufacturing sector, as highlighted by another solid rise in backlogs of work.

As has been the case since last November, Indian manufacturers raised their purchasing activity.

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