Singapore manufacturing falls in May, tech ends growth

SINGAPORE, June 3 (Reuters) - Singapore's manufacturing industry contracted in May for the third month in a row, with the electronics sector shrinking for the first time after 21 straight months of growth, a private sector industry gauge showed on Tuesday.

The Singapore Institute of Purchasing & Materials Management said its purchasing managers' index (PMI) -- a leading indicator for the manufacturing industry -- stood at 49 in May, dipping from 49.3 points in April.

A reading below the 50-point level indicates the manufacturing sector is generally shrinking.

Manufacturing activity is expected to slow across Asia this year as demand weakens in the continent's biggest export markets the United States and Europe.

The contraction in manufacturing reflected declines in new orders, and further weakness in output and employment.

An index for Singapore's key electronics sector, which accounts for about a third of the country's manufacturing output, stood at 49.4 points, down from 50.2 points in April, reflecting contractions in output, inventory, and employment.

Singapore's April factory production slid at its sharpest rate since records started in 1983 as drugs and tech output fell, providing fresh signs of slowing global demand and raising fears over weaker Singapore growth.

The manufacturing sector, a traditional mainstay in the Singapore economy, was worth about a quarter of the island's $169 billion economy in 2007. Purchasing Managers' Index and components:

May 08 Apr 08 Mar 08 Purchasing managers index 49.0 49.3 49.4 Electronics sector 49.4 50.2 50.7