PMI Slips But Stays Expansionary

Singapore dollar unreactive to the PMI release, USD/SGD last up 8 pips at 1.3475. PMI slipped to 50.1 in June from 54.4 in May – just staying in positive territory and the lowest since November 2020.

• Commenting on the latest survey results, Jingyi Pan, Economics Associate Director at IHS Markit, said: "Visible slowdowns of business activity and demand growth amid lingering Phase 2 restrictions were reflected by the latest IHS Markit Singapore PMI for June. Concurrently, supply constraints were exacerbated, as private sector firms saw longer lead times and sustained price pressures. "The disruptions brought about by the resurgence of COVID-19 cases, both domestically and externally in the region, also led private sector firms to be more cautious with purchasing and hiring activities over the month. "That said, things did improve at the end of the month given the transition to Phase 3 and with vaccination underway in the country, private sector firms were generally more optimistic compared to May. IHS Markit forecasts Singapore's GDP to grow at 7.4% in 2021."