Sri Lanka’s manufacturing sector shows rebound in November
The latest Purchasing Managers Index (PMI) released by the Central Bank of Sri Lanka has reportedly noted that the Manufacturing sector has shown a rebound in November with an increase of 17 index points as concerns of Covid-19 eased.
However, despite the Services sector showing a marginal increase compared to the previous month, it remained below the threshold level.
The Manufacturing PMI has reportedly bounced to 57.6 in November 2020 with an increase of 17.3 index points compared to October 2020.
The significant increase in New Orders, particularly in the manufacture of textile and wearing apparel and food and beverages sectors, has mainly contributed to this considerable improvement, a local media report stated.
The increase in the Production sub-index, mainly on account of the manufacture of textile and wearing apparel and non-metallic mineral products sectors, together with lengthening of the Suppliers’ Delivery Time across all sectors have also contributed to the overall increase in the Manufacturing PMI, the report further noted.
Some respondents in the manufacture of food and beverages and textiles and wearing apparel sectors have highlighted that although there was a reasonable/satisfactory demand, they were unable to carry out production at the desired capacity due to lower employee availability due to health related concerns.
Despite the higher increase observed in New Orders and Production, the Stock of Purchases remained contracted with a slight edging up, as there were some accumulated stocks available.
Meanwhile, the sub-index of Expectations for manufacturing activities for the next three months has increased significantly with expectation for the normalisation of economic activities within the country as well as in major export markets.
OSL take:
Sri Lanka’s economy has been resilient through the years and is expected to return to normalcy after the challenges faced due to the global Covid 19 pandemic sooner than expected. Sri Lanka already has several foreign direct investments scheduled for next year. Also, Sri Lanka’s exports sector continued to operate this year despite the Covid 19 challenges. This has resulted in an increase in Sri Lanka’s manufacturing sector. Business/investment opportunities continue to expand in the country’s manufacturing and exports sectors as a result. Sri Lanka’s geographical positioning in the Indian Ocean and the many trade agreements as well as trade concessions enjoyed by the country have made it a business hub in the South Asian region. All these have expanded the business/investment opportunities in Sri Lanka’s manufacturing and exports sectors.
| Article Code : | VBS/AT/18122020/Z_1 |