Manufacturing sector experiencing a sixth straight month of decline

Manufacturing growth continued to show a slide in February - its sixth consecutive month of decline. 

According to the latest release of the latest Purchasing Managers' Index (PMI), the overall manufacturing PMI was 50.4 last month, down from January's 50.7 and the lowest reading since the 50.2 recorded in November 2016.

February marked the 30th straight month of expansion, indicated by the reading of 50 or more on the survey-based index.

Selena Ling, Head of Treasury Research and Strategy, OCBC Bank,  stated in media, "The easing PMI was not unexpected given regional softness and the Chinese New Year holiday in early February."

Looking at the latest PMI figures she has lowered her forecast for first-quarter manufacturing to a 0.5 percent contraction year on year. Her full-year GDP growth forecast is now 2.3 percent, down from an earlier 2.7 percent prediction.

The Singapore Institute of Purchasing and Materials Management has connected the weakening reading to slower growth in new orders and exports, factory output and employment levels.

The electronics sector's PMI remained in contraction for the fourth straight month, edging down 0.1 point in February to 49.5.

New orders, new exports and employment stayed in contraction for a second month, while factory output dwindled for the third month in a row, and order reserve saw its tenth continuous month of recession.

Ling shared the vulnerability in the underlying indicators suggests that the soft patch in electronics is likely to be maintained for the next few months and it is too early to call for a turnaround in this sector.

Taking into consideration the overall ASEAN region, Nikkei manufacturing PMI figures indicate that Thailand and Malaysia's manufacturing sectors are experiencing a decline, but Myanmar, the Philippines, Vietnam and Indonesia are expanding.