KUALA LUMPUR — Commerce in Singapore hit a new low in May due to the coronavirus pandemic and worldwide lockdowns, going by a widely-cited business yardstick published on Wednesday.
The IHS Markit Purchasing Managers’ Index (PMI) – based on a survey of 400 businesses about new orders, output, employment, suppliers’ delivery times and stocks of purchases – dropped to 27.1 during May. Any reading below 50 suggests economic contraction.
IHS Markit said that the decline was because “demand for goods and services plummeted at an unprecedented rate” due to the pandemic.
The impact of a lockdown that ran from April 7 until Tuesday saw new orders collapse in May – when “firms remained firmly in retrenchment mode, reducing staff numbers and input purchasing.”
“Heightened business uncertainty and fears of a protracted downturn led business confidence to slump,” IHS Markit added.
Though Singapore has confirmed 35,836 cases of the virus – the second-biggest caseload in East and South-east Asia after China – many businesses reopened on Tuesday, a relaxation the government believes will reopen 75 per cent of the economy.
The government predicts a recession of up to 7 per cent in 2020, but has committed to spend almost a fifth of gross domestic product to rescue the economy.
However, domestic measures may not be enough prevent contraction of Singapore’s small but wealthy economy – which depends heavily on trade with and investment from abroad.
IHS Markit’s Joe Hayes said “tourism restrictions and a sharp deterioration in the global economy have weighed drastically.”
Transit flights through the city-state’s busy airport resumed on Tuesday and the government is discussing resuming travel with countries where the virus is not spreading.Show