Sri Lanka’s manufacturing kicks off 2025 with improvement
Daily FT: The manufacturing sector has kicked off 2025 with an improvement in January as against December, as per the Sri Lanka Purchasing Managers’ Index (PMI).
Its compiler, the Central Bank of Sri Lanka (CBSL), said the PMI for Manufacturing recorded an index value of 59.0 in January 2025, indicating a further expansion in manufacturing activities. All sub-indices contributed positively to this improvement. In December 2024, the index value was 57.2.
Most of the survey participants from the manufacture of textiles and apparel sector reported favourable developments in January, driving expansions in the New Orders, Production, Employment, and Stock of Purchases sub-indices. In addition, the manufacturing of food and beverages sectors continued to remain positive, even after the December festival season. Meanwhile, the Suppliers’ Delivery Time sub-index further increased in January, in line with the increase in activity levels.
The outlook for manufacturing activities for the next three months remains positive, anticipating improved business conditions, according to the CBSL.
The expansion in Business Activities was driven by improvements observed across most of the sectors. Accordingly, business activities in the financial services sector continued to improve supported by increased lending activities. Further, business activities in the accommodation, food and beverage sector also showed a considerable improvement during January 2025 driven by a steady growth in tourist arrivals. Meanwhile, education, professional services, and transportation-related business activities also recorded improvements during the month.
New Businesses increased in January 2025, primarily due to expansions observed in the financial services, transportation, and accommodation, food and beverage related activities.
Employment continued to increase amid recruitments across many companies. Meanwhile, Backlogs of Work declined on a month-on-month basis, following the increase recorded in the previous month.
OSL take:
Sri Lanka’s manufacturing sector, while showing a steady growth at present, has also shown great resilience even during the economic crisis faced by the country in 2022. During the economic crisis, the local manufacturing sector served as a revenue generator to the country and is now continuing to post growth and expansion with local businesses engaged in the sector recording growth and profits. Sri Lankan authorities realizing the growing business potential is looking at further uplifting and developing the manufacturing sector. The country’s expanding trade ties with many countries also serve to give a further boost to Sri Lanka’s manufacturing sector. Given all these positive developments, foreign businesses/investors could explore the expanding business/investment opportunities in Sri Lanka’s manufacturing sector while also looking at expanding operations through local collaborations.
| Article Code : | VBS/AT/20250304/Z_4 |