SINGAPORE — Sentiments in the manufacturing sector returned to an expansionary mood after activities contracted in August, the latest Purchasing Managers’ Index (PMI) provided by the Singapore Institute of Purchasing and Materials Management (SIPMM) today (Oct 1) shows.

The PMI reading for September was 50.5, crossing the 50-point line dividing contraction and expansion following August’s 49.7, SIPMM said, adding that the expansion was driven by improvements in new export orders.

Last month, the reading for overall new export orders also recovered to 50.7 from August’s 49.8. The same momentum is reflected in new export orders for the electronics sector, which jumped from 50.5 previously to 51.4 last month.

As a result of stronger domestic and overseas demand, the electronics sector — which is one-third of Singapore’s manufacturing — recorded a PMI reading of 51.9, up from August’s 50.7 to mark the 20th straight month of expansion. Production in the sector also improved strongly from 50.9 to 53.6.

The Republic’s better PMI readings in September came as the economic outlook remains uncertain. Last week, industrial production data provided by the Economic Development Board indicated a rebound but economists said it’s merely due to a low base from 2013, adding that external conditions are not yet positive.

The Government however still expects a gradual recovery in global economy to drive Singapore’s manufacturing economy towards year-end. The official forecast for GDP growth in 2014 remains at 2.5 to 3.5 per cent.