Singapore factory activity contracts for second straight month

Manufacturing activity in Singapore shrank again in May, although at a slower pace than the month before, as US President Donald Trump's tariffs continued to threaten the global economic outlook, despite a de-escalation in the US-China trade war.

- Ovais Subhani

The purchasing managers' index (PMI), a barometer of the manufacturing sector's health, edged up 0.1 point from April to post a slower contraction reading at 49.7 points.

Readings above 50 indicate growth, while those below point to contraction.

This is the second contraction reading for the overall manufacturing sector, after having recorded 19 months of expansion, said the Singapore Institute of Purchasing and Materials Management (SIPMM), which issued the report on June 2.

Before falling into contraction in April, the last time the manufacturing PMI reading was below 50 was in August 2023 when it stood at 49.9 points, SIPMM data showed.

Mr Stephen Poh, SIPMM's executive director, said the slower contraction reading in May could be a result of thawing US-China trade tensions, with the world's two largest economies slashing their tariffs substantially.

"However, global uncertainty remains despite the temporary suspension of tariffs," he said.

Under an agreement reached on May 12, the US slashed tariffs on China from 145 per cent to 30 per cent, while Beijing's retaliatory levies on US goods were lowered to 10 per cent from 125 per cent.