Here's proof that Singapore manufacturing's recovery is losing steam

Tech PMI disappointed analysts.

According to CIMB, another month of subdued manufacturing orders and output pulled Dec’s PMI down to 49.7 (-1.1 pts mom), its first sub-50 reading after nine consecutive months of expansion.

For the same reasons, Dec’s Tech PMI dipped 1.1 pts to 50.1, its lowest in nearly a year. While a handful of regional and global PMIs showed modest, albeit uneven, improvements in their year-end manufacturing, the latest Singapore PMI readings suggest that its manufacturing sector is struggling.

Here's more from CIMB:

Singapore’s manufacturing sector contracted last month
Singapore’s factories were not particularly busy in 4Q13, if the monthly PMI readings were any guide. The PMI had recovered 0.7 pts to 51.2 in Oct, its highest reading in three months, but dipped 0.4 pts in Nov and a further 1.1 pts in Dec on the back of lower orders and output to 49.7 pts (consensus and CIMB forecasts: 51.1 and 51.2, respectively).

Backlog orders slipped for the second month (-1.5 pts to 49.0), and the third consecutive month of import losses (+0.3 pt to 48.9) suggest further downside risk in the PMI.

While there are no sectoral breakdowns (except for tech) in these monthly PMI releases, gauging by the monthly IP data, the main drag on Singapore’s manufacturing sector in 4Q13 were softer chemicals, precision and transport engineering.

Tech recovery not on solid ground solid yet
Singapore’s Tech PMI gained 0.9 pts in Oct/Nov13 on festive export orders. The 1.1-pt retreat in Dec’s Tech PMI to 50.1 was not unexpected but the sequential decline was larger than expected (consensus and CIMB forecasts: 51.4 and 50.4, respectively).

All key components declined, with backlog orders giving up 0.9 pts (-3.5 pts in Nov) to 48.7, the lowest in a year.

The weaker order flows (new and backlog orders) suggest that Singapore’s tech recovery is still lagging behind the tech recoveries in Taiwan and South Korea, where companies reported stronger year-end new component orders.

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