In December, Singapore's private sector experienced moderate expansion, with new orders growing at a tempered pace, as reported by S&P Global on Monday. The city's purchasing managers index (PMI) for December stood at 51.5, a decrease from the 53.9 recorded in November. Nevertheless, this figure remains above the pivotal 50-mark, which indicates a transition from contraction to growth.
Unlike many other nations and regions that provide distinct PMIs for the manufacturing and service sectors, Singapore only publishes a unified PMI that reflects the overall performance of both sectors. The monthly report highlighted that growth in new business and overall output decelerated to modest levels in December.
Additionally, the level of outstanding business increased only slightly. Business activity in Singapore saw the softest expansion rate in 22 months, as many managers opted to modestly reduce payrolls amidst rising wage costs that imposed a cooling effect. In terms of sector performance, the finance and insurance sector led the way in December; however, manufacturers and construction firms reported notable declines.
Another important insight from the report was that selling price inflation diminished to a six-month low, although it remains above long-term averages, indicating persistent cost pressures in the economy. Despite the deceleration in business expansion during the month, there was a silver lining as business managers expressed an increase in optimism.
Business confidence rebounded to a level surpassing the long-run average, signaling an improved outlook for output growth in 2025. This resurgence in optimism suggests that while current expansion may be tempered, there are positive expectations for the future of Singapore's economy. The Singapore PMI is compiled from surveys conducted across 400 private-sector companies between December 5 and December 18..