Sri Lanka’s manufacturing and services activity rises
The Morning: Sri Lanka’s Manufacturing Purchasing Managers’ Index rose to 61.0 in October, signalling a broad-based expansion in factory activity. All key sub-indices contributed positively to the improvement, reflecting stronger demand conditions ahead of the festive season.
The rise in new orders was led by the food and beverage sector, where many manufacturers reported receiving higher volumes of production orders for the coming holiday period. Firms increased output during the month to meet this demand, pushing the Production sub-index higher. Employment also rebounded after earlier declines, while stock levels rose in line with the increases in new orders and production. Supplier delivery times continued to lengthen, although the pace of lengthening moderated.
The October PMI marked an improvement from September’s reading of 55.4. New Orders rose from 59.0 to 64.0, Production increased from 55.5 to 62.5, and Employment moved up from 46.0 to 56.0. Stock of Purchases rose from 57.5 to 62.5. The only sub-index to record a slowdown was Suppliers’ Delivery Time, which edged down from 59.0 to 58.0 but remained in lengthening territory.
Global conditions were mixed. PMI data compiled by S&P Global showed rising activity at the same rate globally, slower improvements in India and China, faster growth in the United States, a slower contraction in the United Kingdom, and a shift from contraction to neutrality in the Eurozone.
Local manufacturers expect activity to remain positive in the next three months, reflecting improved sentiment and continued festive season orders.
Sri Lanka’s services sector also strengthened in October. The Services PMI rose to 66.0, indicating faster expansion compared to September. Business activity picked up across several service industries, led by wholesale and retail trade. Financial services activity improved further, supported by increased lending. Other personal service activities and goods transportation also contributed to the overall expansion.
OSL take:
Sri Lanka’s manufacturing and services industries have been on a steady growth path through the years showing great resilience to external and internal economic challenges faced by the country. Even amidst the economic crisis faced by the country in 2022, these two sectors continued to operate showing resilience while also generating revenue to the country. Therefore, the ongoing economic activities and overall economic expansion have also resulted in the expansion of the country’s manufacturing and services industries, creating a host of business/investment opportunities in the process as well. The ongoing expansions in the manufacturing and services industries range from the development of infrastructure and supplementary infrastructure development to upgrading operations to be on par with the rapidly changing global standards. Given all these factors and Sri Lanka’s path towards becoming a regional hub, foreign businesses/investors could confidently explore the business/investment opportunities in the country’s manufacturing and services industries as well as sectors related to them.
| Article Code : | VBS/AT/20251124/Z_2 |