The Week in Numbers: Singapore’s Factory Activity Up
Earlier this week, North Korea conducted its 6th nuclear test that generated tremors five to six times as powerful as its previous nuclear test. The blast was so massive that it was estimated to be equivalent to an earthquake of magnitude 6.3 on the Richter scale. Estimates of its size vary from 50 to 160 kilotons. Worryingly, even the lowest estimate is much larger than the 15-kiloton US bomb that destroyed Hiroshima in 1945.
The European Central Bank (ECB) left its benchmark interest rate unchanged at 0.0% and said that it plans to keep it at current levels for an extended period. The ECB also said that it estimates the euro zone to grow by 2.2% in 2017, an improvement from a previous estimate of 1.9%. The euro rose higher on the news. Year-to-date, the euro has now risen 13% against the greenback.
Back home, factory activity rose for the 12th straight month in August. This was partly due to the strong showing of electronics production, which is at a 7-year high. Purchasing manager’s index (PMI), an early indicator of manufacturing activity, was up to 51.8 last month, an improvement of 0.8 from July. A reading above 50 indicates growth. Electronics sector had a strong PMI reading of 53.2, up one point from July’s 52.2.
Meanwhile, The Australian Bureau of Statistics reported gross company profits declined 4.5% in the second quarter of the year. This was a marked drop from the first quarter’s gain of 6%. Mining suffered a 15% decline at pre-tax level. Wages and salaries rose by 1.2% or A$1.6 billion.
Finally, China’s service industry expanded at a faster clip in August as compared to July. It reported a PMI of 52.7, the highest reading in 3 months. The Caixin index for factory activity was 51.6, the highest in six months. Government statistics show that the service sector, which accounts for slightly over 50% of the economy, grew 7.7% on an annual basis. This outpaced overall GDP growth, which came in at 6.9%. Caixin composite manufacturing and services PMI also rose to 52.4 last month from 51.9 in July.