Singapore’s private sector expanded at a quicker pace in May after improvements in demand and output drove a renewed rise in employment levels. 

“It was encouraging to see cost pressures ease for private sector businesses, which translated to a slower increase in charges over May,” said Economics Associate Director at S&P Global Market Intelligence Jingyi Pan in a note on Wednesday. 

The headline seasonally adjusted S&P Global Singapore Purchasing Manager’s Index, which is a composite single-figure indicator of the private sector’s performance – came in at 52.2 in May, rising from 52.6 in April.  

May was the 15th consecutive month that business conditions improved in the Singaporean private sector. 


In an interview with Diplomatic Network (Asia), Pan said: “May PMI showed the rate of input cost inflation eased to the lowest since November 2023 in Singapore, attributed mainly to falling purchase price inflation while wage costs increased at a quicker pace. 

“Survey panellists further indicated that input material and transport costs increased at a slower pace in May, with some suppliers having also lowered prices or offered discounts to drive sales.” 

With input cost inflation easing to its lowest rate since November 2023, companies may see relief in their overall cost structures, potentially improving profit margins if selling prices remain stable. 

The reduction in purchase price inflation indicates that the cost of materials and goods needed by businesses has decreased, leading to lower production costs. However, this benefit is somewhat offset by the quicker pace of wage cost increases, likely due to the “tight labor market”. 

Positive outlook

Purchasing levels rose among firms in Singapore, driven by higher activity in May, according to Pan. 

In addition to this, Pan said: “Firms also [indicated] that they have acquired more inputs as safety stock in anticipation of higher future activity.” 

This hints at more expansions in business activity going ahead, with the Consumer & Services sector being the most upbeat about the future.  

“Anecdotal evidence from our survey indicated that consumer services firms were generally positive that market conditions will continue to improve and business development efforts can bear fruits, altogether helping to keep business activity in growth in the next 12 months,” Pan told DNA. 

The S&P Global Singapore PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 private sector companies. The panel is stratified by detailed sector and company workforce size, based on contributions to GDP. The sectors covered by the survey include manufacturing, construction, wholesale, retail and services.   

Survey responses are collected in the second half of each month.