Singapore’s electronics Purchasing Managers’ Index (PMI) rose by 0.2 points to 51.9 in May, marking its strongest performance since August 2018, according to UOB Global Economics and Markets Research. The overall PMI increased by 0.3 points to 51.0, indicating sustained growth driven by AI-related demand expected to continue through the second and third quarters of 2026.
The report highlights improvements in several sub-indices, including new orders, output, employment, and future business expectations, reflecting robust demand in the electronics sector. However, the rise in order backlogs and a decline in stocks of finished goods suggest that production is struggling to keep pace with demand. “Greater scope to enhance capacity utilisation should bode well for electronics manufacturing activity in the months ahead,” the report notes.
The ongoing Middle East conflict has impacted supply chains, contributing to a 0.3-point increase in the input prices sub-index, primarily due to rising energy and logistics costs. Additionally, the supplier deliveries sub-index fell by 0.4 points to 48.7, attributed to extended lead times amid persistent supply chain constraints.
The data underscores the need for Singapore’s electronics manufacturers to boost production capacity to meet the growing demand, whilst also navigating the challenges posed by global supply chain disruptions. As firms continue to draw down inventories, the sector’s ability to adapt will be crucial in maintaining its growth trajectory.
