Electronics shines as non-electronics expansion weakens

Shipment challenges for broader manufacturing sector raise concern

- Colin Tan

Factory output for electronics and non-electronics continue to diverge for a second month in June and may start to become a source of concern.

The purchasing managers' index (PMI), a barometer of the manufacturing sector, dipped to 50.4 points in June, from May's 50.6 points, according to the latest data released by the Singapore Institute of Purchasing and Materials Management on July 2.

In contrast, the electronics PMI, a key sector of manufacturing, rose to 51.2 points, from the previous month's 51.1 points.

This divergence is also reflected in the underlying indexes for both the manufacturing and electronics PMIs.

On the one hand, the good news is that electronics has continued to do well, in spite of the weaker showing by the non-electronics manufacturers.

DBS economist Chua Han Teng said: "The performance of Singapore's electronics cluster, which accounts for almost half of overall manufacturing production, will be key to the manufacturing recovery in 2024." He noted that the electronics PMI was also at its highest since September 2021 and felt that this should negate concerns regarding the modest pullback in the latest headline factory gauge.