Singapore Factory Activity Growth Hits 10-Month High

Singapore’s Manufacturing PMI rose to 50.5 in January from December's 50.3, sustaining a six-month period of mild expansion. This was the highest reading since March last year, driven by increases in new orders, exports and output. Still, manufacturers continued to face capacity constraints and supply-chain disruptions. "Avoidance of the Red Sea and Suez Canal routes has lengthened transit times and slowed turnaround schedules", said SIPMM executive director Stephen Poh. The PMI for electronics, which accounts for about one third of the country's output, rose to 51.1 from 50.9 in December, as ongoing strong demand for AI-related memory chips boosted new orders, exports, output, input purchases and employment.

Singapore’s Manufacturing PMI edged up 0.1 point to 50.3 in December from 50.2 in November, marking the fifth consecutive month above the 50-point threshold and the highest reading since March 2025, signaling a modest but sustained expansion in manufacturing activity. The increase was supported by stronger new orders and factory output. The electronics sector, which accounts for roughly a third of manufacturing activity, remained the strongest performer, with its PMI climbing to 50.9 for the seventh straight month, underpinned by robust AI-related server demand and US tariff exemptions on electronics goods. However, broader manufacturing momentum showed signs of slowing, with weaker growth in new export orders and input purchases, while employment conditions remained subdued, highlighting a divergence with the electronics segment. Looking ahead, the electronics upcycle may face 2026 headwinds from US semiconductor tariffs, softer AI demand, and capacity and logistics constraints.

Singapore’s Manufacturing PMI edged up 0.2 point to 50.2 in November from 50.0 in October, marking the fourth consecutive month above the 50-point threshold and the highest reading in eight months, signaling steady expansion in the sector. The gain was largely driven by the electronics segment, which accounts for roughly 40% of total manufacturing output. The electronics PMI rose 0.2 point to 50.6, extending a six-month streak of expansion, underpinned by robust demand for AI-related servers and components, as well as US tariff exemptions on electronics products. New orders and new export orders have improved since April, though they remain below the levels seen in the first quarter prior to the US “Liberation Day” tariffs. Forward-looking business indicators suggest that AI-driven demand could maintain resilience in the medium term, providing continued support to Singapore’s manufacturing growth.