Business conditions in Singapore’s private sector weakened for the first time in nearly two years in January as Covid-19 made a return.  

“The impact of COVID-19 cases on Singapore’s private sector in January was clearly laid out by PMI survey respondents,” said Andrew Harker, an economics director at S&P Global Market Intelligence, in a note on Wednesday.  

The headline seasonally adjusted S&P Global Singapore Purchasing Manager’s Index slipped into contraction territory in January with a reading of 49.9, compared to December’s PMI of 51.5. Anything above the 50.0 point mark denotes expansion in the sector, while anything below means it contracted.  

“Firms pointed to impacts on output, new orders, supply chains and business confidence, and this all combined to bring growth to an end at the start of 2025,” said Harker.  

For the first time in over two years, new business dropped a little. However, strong demand helped reduce the negative impact of illness spreading. Business activity also slowed down at the same rate as new orders, ending two years of growth. 

Sector by sector 

Activity decreased across the Wholesale & Retail, Finance & Insurance and Construction segments.  

Meanwhile, Manufacturing, Consumer Services, Transport, Information & Communication and Real Estate & Business Services all saw expansion in January. 

Covid-comeback 

The spread of Covid-19, which was a repeated trend in anecdotes from the panelists, equally hurt the business confidence levels going ahead.  

Optimism dropped “sharply”, S&P Global said, and was the lowest in almost two years. 

“These effects should hopefully prove temporary, however, and underlying demand should be resilient enough to see a swift bounce-back in the months ahead once the virus is brought back under control,” Harker said.  

The illness further exacerbated delays in suppliers’ delivery times, which have continued to lengthen. For the past 18 months, suppliers have faced ongoing challenges in meeting expectations. Vendor performance has been significantly impacted by persistent issues such as shipping constraints and labor shortages, with Covid-19 being the latest addition to lead time woes.  

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.