Manufacturing and services sectors in Sri Lanka kick off 2026 with improvement
Daily FT: The manufacturing and services sectors have kicked off 2026 with expansions, but at a slower rate compared to the seasonal peak in December 2025, as per the Purchasing Managers’ Index (PMI).
Its compiler, the Central Bank of Sri Lanka (CBSL) said the PMI for Manufacturing (PMI – Manufacturing) recorded an index value of 56.1 in January, indicating month-on-month (MoM) expansion in manufacturing activities at a slower rate. All sub-indices contributed positively to this improvement. In December 2025, the index value was 60.9.
Most of the survey participants reported New Orders and Production remained expanded in January.
In addition, employment also expanded, while Stock of Purchases registered a MoM increase, mainly due to inventory buildup ahead of the Chinese New Year holidays.
However, Suppliers’ Delivery Time remained lengthened during the month.
The outlook for manufacturing activities for the next three months indicates an improvement, according to the CBSL.
The expansion in business activities was driven by improvements observed across most of the sectors.
The growth was driven by strong performance in wholesale and retail trade and accommodation, food and beverage service activities.
In addition, business activities related to financial services also continued to improve, underpinned by increased lending activity.
New businesses increased in January, underpinned by increased demand for financial services, as well as improved activity in education and transportation of goods and passengers, including warehousing.
Employment continued to rise in January 2026, reflecting workforce expansion by firms to meet increased demand.
Meanwhile, backlogs of work declined on a MoM basis, following the increase recorded in the previous month.
Expectations for business activity over the next quarter improved further, supported by favourable macroeconomic conditions, expected seasonal demand, and the continued normalisation of operations following weather-related disruptions, the CBSL said.
OSL take:
The expanding manufacturing and services sectors in Sri Lanka further indicate the country’s overall economic activities and expansion. With Sri Lanka poised as an emerging business destination in the South Asian region supported by the country’s strategic positioning in the Indian Ocean, strong trade ties with many foreign countries and the improving ease of doing business environment in the country, there’s increasing business/investment opportunities covering all economic sectors present a host of lucrative business ventures for foreign businesses/investors on the lookout for such in the region. Given these factors and the steadily growing economy with a strong and expanding private sector, Sri Lanka is the ideal business/investment destination. Foreign businesses could also look at expanding operations in Sri Lanka through partnerships or joint ventures with local businesses.
| Article Code : | VBS/AT/20260223/Z_4 |