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Electronics dip imminent in Singapore

Posted: 13 Jul 2006 ?? ?Print Version ?Bookmark and Share

Keywords:electronics? Singapore? Institute of Purchasing and Materials Management? PMI? Purchasing Manager's Index?

The city-state's technology sector is bracing for a slowdown after the Institute of Purchasing and Materials Management recently reported a downturn in the local electronics industry in its benchmark Purchasing Manager's Index (PMI).

The institute's June index for the electronics segment dipped 4.6 points from the prior month to 48.2, indicating a contraction for the first time in nearly a year.

A PMI rating of over 50 means manufacturing is expanding while any figure below that indicates an industry is in decline.

The institute attributed the sector's relatively poor performance to "a decline in new orders and new export orders."

"In addition, the sector recorded contractions in production output, input prices as well as stocks of finished goods," it added.

This stood in marked contrast to the overall manufacturing sector, which according to the PMI grew in June for the third straight month on the back of "new orders and new export orders, higher production output and inventory level."

Singapore's Ministry of Trade and Industry also sees tougher times for manufacturers. In a June report the ministry predicted the sector would register 10.4 percent growth for the second quarter of 2006, a higher rate than the economy as a whole but barely half the 20.2 percent growth seen in the first quarter of the year.

The ministry attributed the decline to "lower output from the biomedical manufacturing cluster." Industry analysts here expressed concern about a projected electronics contraction since the sector, especially semiconductors, have accounted for much of Singapore's economic growth and exports.

- Jonathan Hopfner
EE Times

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