Electronics output in Singapore rose in April 2009 on account of rising local and overseas orders to replenish vacant inventories of businesses.
According to the recent Purchasing Managers' Index (PMI) released on May 12, 2009, the production of electronic goods in Singapore rose for the first time in April 2009 after September 2008 due to new overseas and local orders, as reported by Straitstimes.
The PMI of Singapore Institute of Purchasing & Materials Management scaled up to reach 49.2 in April from 47.1 in March and 45.0 in February 2009. However, the electronics PMI of the institute jumped to 51.6 in April from March.
The PMI is a composite index that is based on leading market indicators and varying weights. Singapore's PMI, which gradually surged in April on new export orders, probably indicates towards the end of a contraction period of eight months.
Singapore's electronic industry also puts an end of six straight months of contraction in April 2009, pointing to the possible recovery of the sector that represent one third of the Singapore's manufacturing output.
The replenishment of empty inventories by businesses gave an impetus to the production and demand in April 2009 that ultimately benefitted the technology sector. Moreover, the growth prospects appear comparatively bright for the electronic sector.
The uptrend in PMI has confirmed that the country's economy is gradually recovering from the slowdown. Upward movement of PMI graph is certainly a good news and is in line with the improvement that is being observed in the rest of the region. Economists believe that much depends upon the improvement in consumer confidence and private consumption.
According to a Research Analyst at RNCOS, "The manufacturing sector in Singapore is expected to rebound in Q1 2009, which will probably reduce the annual contraction in the GDP. However, it will be premature to say that the manufacturing sector is back on track. There is still a big challenge in the form of private consumption as the businesses are continuously declining in OECD countries and the US. So, sustainability remains a major unsolved issue at the moment."
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