Singapore factories hum as PMI rises

Singapore’s factory sector kept expanding in August even as shipping delays and higher energy costs spread through regional supply chains. The Singapore Institute of Purchasing and Materials Management, or SIPMM, said on September 2 that its manufacturing purchasing managers’ index rose to 51.5 in August from 51.4 in July. A reading above 50 signals expansion. The electronics PMI, a closely watched gauge in Singapore’s export-heavy economy, rose to 52.6 from 52.4. The August data showed a manufacturing base still supported by technology demand, especially for AI-related hardware, while logistics strains tied to the Middle East conflict pushed delivery times out further and lifted input costs. Economists cited in local media said the sector’s near-term support was coming from semiconductors, servers and related electronics orders, even as performance remained uneven across clusters. ### Why does a move from 51.4 to 51.5 matter? The 51.5 reading extended Singapore manufacturing’s expansion streak to 13 straight months, according to SIPMM data reported on September 2. Trading Economics said the figure matched the level last seen in November 2018. A PMI move of 0.1 point is small, but the underlying details were firmer. SIPMM said growth in new orders, new exports, factory output, input purchases and employment all strengthened in August. ### Which parts of manufacturing are doing the heavy lifting? The electronics PMI rose to 52.6 in August from 52.4 in July, according to Trading Economics and local media reports citing SIPMM. (tradingeconomics.com) Electronics accounts for more than one-third of Singapore’s manufacturing output, Trading Economics said. Fu Hao, executive director of SIPMM, said Singapore manufacturing was still benefiting from an AI-driven semiconductor cycle, with order backlogs at a record high and employment remaining strong, according to Lianhe Zaobao’s report. (marketscreener.com) DBS senior economist Chua Han Teng said external demand for hardware including memory chips and server-related products should remain a main driver under continued AI infrastructure spending. (tradingeconomics.com) ### What is the Iran war doing to factory supply chains? The supplier deliveries index fell to 47.5 in August, marking an eighth straight month of contraction, Lianhe Zaobao reported, citing the SIPMM release. A sub-50 reading on that measure points to longer delivery times. Fu Hao said the Middle East supply-chain crisis had continued to worsen, seriously affecting supplier delivery times and causing input prices to surge, especially energy costs, according to the same report. (zaobao.com.sg) Trading Economics also said the conflict in the Middle East was deepening supplier delays and pushing up input prices. ### Are factories hiring and building inventory, or running lean? (zaobao.com.sg) Employment remained one of the stronger parts of the August report. Lianhe Zaobao said electronics hiring rose to 52.1, the 12th straight month of expansion, and remained above the broader manufacturing reading. Finished-goods inventories kept shrinking as demand held up. Trading Economics said firms were continuing to draw down inventories, while Lianhe Zaobao reported that finished-goods stock contracted faster as demand accelerated. (zaobao.com.sg) Imports, input prices and order backlogs also increased in August. ### How are economists reading the next few months? DBS’s Chua said Singapore manufacturing remained resilient despite geopolitical uncertainty and that the near-term outlook was still constructive, according to Lianhe Zaobao. (zaobao.com.sg) He also said manufacturing performance could remain uneven, with some clusters showing weakness even as electronics stayed firm. (tradingeconomics.com) UOB assistant economist Xu Junjie said rising input prices in both manufacturing and electronics reflected a jump in energy prices and could also point to worsening “tech-flation” pressures from chip shortages, the report said. OCBC chief economist Selena Ling said manufacturing growth could slow in coming months but was unlikely to see a sharp pullback in the short term. (zaobao.com.sg) ### When is the next signal on Singapore factories due? SIPMM lists October 2, 2026, as the next release date on its PMI calendar. The institute says its PMI is compiled from monthly surveys of supply chain management professionals across more than 150 industrial companies. (pmi.sipmm.edu.sg) (zaobao.com.sg)