Singapore’s private sector firms improve robustly in September

Private sector firms of Singapore hinted at the most solid rebound in operating conditions for over one-and-a-half-year in September, driven by surges in output and new business. The Nikkei Singapore PMI strengthened further in September to 52.9 from 52.3 in August, the highest since February 2015. This is the fifth consecutive month that the services PMI index remained in expansion territory. Output rose strongly to 58.2, the highest since November 2015. Meanwhile, a renewed upturn in export sales stimulated stronger growth in new orders.

The stronger PMI print augurs well for Singapore’s fourth quarter economic growth momentum, particularly when coupled with the green shoots seen for the recent prints of manufacturing and electronics PMI, said OCBC Economist in a research note. The recovery in export sales, which increased for the first time since Feb, might be partially seasonal. However, it might also reflect the still sound domestic demand in Asia.

However, the weakening of Singapore’s labor market is expected to continue. Both the services and manufacturing PMIs’ employment measures continue to be tepid and imply that intentions for business hiring continue to be cautious. This added to the companies’ payrolls slightly in September. This in turn added to the sharpest rise in backlogs of work since the survey started in August 2012.