Factories to hire again

RISES in unemployment could slow over the coming months with new data showing that Singapore factory owners have begun to hire again.

The monthly purchasing managers' index (PMI) published on Tuesday indicated that employment expanded for the first time in 19 months during July. Last month's employment index was 50.2, compared to 48.1 in June and 48.5 in May.

A reading above 50 indicates that employers are hiring, while one below suggests they are firing.

But economists warned that there could still be more job losses as Singapore approaches the end of the year, with Seagate's closure of its Ang Mo Kio hard disk plant with the shedding of 2,000 jobs a case in point.

The index highlighted that factory output continued to recover with the overall PMI expanding for the third straight month to 51.5.

The 0.4 point improvement over June was due to a rise in new orders from home and abroad.

PMI's latest forward-looking reading, which is based on a survey of purchasing executives at 150 companies conducted by the Singapore Institute of Purchasing & Materials Management (SIPMM), is in line with similar findings in the US and China.

In the US, the index approached 50 after rising to 48.9 last month, while China's July reading of 53.3 continued to show growth in factory activity for the fifth straight month.

'It appears that the manufacturing economy has bottomed out... and is now heading towards a possible recovery,' said Ms Janice Ong, executive director at SIPMM.

Electronics employment was boosted for the first time since June 2008 as the sector saw its July rate of expansion hit 55. This key sector employed 91,645 here last year, or about 22 per cent of all manufacturing jobs.

- The Straits Times