Singapore’s private sector expanded at a strong pace in July amid an acceleration in new business growth.  

“July’s PMI data revealed to us that Singapore’s private sector expansion remained robust going into the second half of 2024,” said Jingyi Pan, an economics associate director at S&P Global Market Intelligence, in a note on Monday. 

“Business activity growth was observed across the majority of sectors tracked, led by firms in the transport, information & communication segment.” 

The headline seasonally adjusted S&P Global Singapore Purchasing Manager’s Index, a composite single-figure indicator of the private sector’s performance, rose to 57.2 in July from 55.2 in June. Any reading above 50.0 indicates sector expansion. 

July marked the 17th consecutive month of improved business conditions in Singapore’s private sector. 

New business spurs strong growth

Higher levels of purchases and inventory holdings were driven by accelerated growth in new business and activity. 

Subsequently, there were also healthy levels of hiring during the month.  

“While confidence levels converged with the long-run average, we saw businesses hiring at a solid pace in July, which reflected their expectations for growth,” Pan said.  

“Furthermore, forward-looking indicators, including the new orders and backlogs of work indices, remained elevated, thereby pointing to sustained expansions in the coming months.” 

Spurring the positive future sentiment and workforce growth was an accumulation of backlogged work. 

In July, the performance of vendors worsened due to a combination of supply shortages and shipping delays. These supply constraints limited the availability of necessary goods and materials, making it difficult for vendors to meet demands. 

Rising costs continue to add pressure

Meanwhile, inflation continued to rear its ugly head. Average input costs rose due to higher purchase prices and transport costs.  

“Price pressures notably heightened in the latest survey period, stemming specifically from input material and transport costs as wage inflation eased,” Pan said.  

“This led to the first increase in selling price inflation in three months, which will be worth monitoring.” 

Singapore’s private sector remained upbeat about the future, however. Specifically, vendors looked forward to new product launches and “other business development efforts” with the hope that these will drive sales in the year ahead.

Data

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.