SINGAPORE (Apr 8): Markets around the world gained earlier in the week after the US Federal Reserve said it would not raise rates further this year. However, the momentum faltered by April 4, and markets in Asia ended the day mixed.
The latest monthly update of the Purchasing Managers’ Index, a closely watched forward indicator of economic activity, shows manufacturing activity remains tepid. For March, the PMI came in at 50.8 points, up 0.4 percentage point from February.
However, the electronics sector, which is a critical component of the overall index, was down for the fifth straight month to 49.8 points. A PMI reading above 50 indicates expansion, and a reading below that signals a contraction. “Barring further signs of pickup in both business and consumer confidence, it is still difficult to see manufacturing or electronics emerging as the key driver for 1H growth for the Singapore economy at this juncture,” note OCBC economists. They expect Singapore’s 1Q GDP growth to come in at a “relatively lacklustre” 1.8% y-o-y.