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Singapore PMI drops below 50 for first time in almost 3 years

Skyline of the financial business district in Singapore. (PHOTO: Roslan Rahman/AFP)

By Michelle Jamrisko

(Bloomberg) -- Singapore’s purchasing managers index slumped in May, signaling a contraction in manufacturing as trade tensions and a global slowdown weigh on the city state’s economy.

The PMI declined to 49.9 last month, dropping below 50 for the first time since August 2016, according to data from the Singapore Institute of Purchasing and Materials Management. The electronics sub-index fell to 49.4, its weakest level since June 2016. A reading of 50 marks the dividing line between expansion and contraction.

A slowing electronics cycle has weighed on the overall index since last year. The outlook is worsening as the U.S.-China trade war escalates and President Donald Trump threatens countries like Mexico with higher tariffs, putting the global economy at risk.

Singapore’s data are in line with the general trend across Asia, with PMI reports on Monday showing another slump from export powerhouses Japan and South Korea.

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