Sri Lanka’s manufacturing, services PMI picks up in February
Daily FT: The country’s manufacturing and services sectors in February have expanded, as per the Purchasing Managers’ Index (PMI), its compiler the Central Bank of Sri Lanka (CBSL) said.
The Manufacturing PMI registered an index value of 56.8 in February, reflecting an increase in manufacturing activities at a faster rate compared to 56.1 in January 2026.
The CBSL said this increase was broad-based, with all sub-indices contributing positively to this expansion.
The New Orders and Production sub-indices expanded in February, albeit at a slower rate compared to the previous month. The Employment and Stock of Purchases sub-indices expanded further during the month, reflecting the firms’ preparations ahead of the festive season.
Further, some firms reported pre-emptive stocking in anticipation of potential supply pressures stemming from the unrest in the Middle East.
However, the Suppliers’ Delivery Time lengthened further, indicating increased pressure on supply chains.
The CBSL said the outlook for manufacturing activities over the next three months remain positive, driven by anticipated festive demand, whilst also noting that many respondents expressed caution about potential adverse implications if the conflict in the Middle East continues.
The Services PMI registered an index value of 54.4 in February, indicating a slower expansion in services activities compared to 64.5 in January 2026.
Business activities expanded underpinned by broad-based improvements across most sectors. This growth was primarily driven by robust performance in professional services and other personal service activities.
The accommodation, food and beverage, and education sectors continued to demonstrate sustained growth.
The CBSL said new businesses continued to expand in February 2026, supported by increased demand for accommodation, food and beverage services, alongside a notable uptick in other personal service activities.
In addition, employment continued to increase in February 2026, as firms expanded their workforce to meet rising consumer demand.
However, backlogs of work continued to diminish at an accelerated pace during the month.
The CBSL noted that expectations for business activity over the next three months strengthened further, supported by anticipated seasonal demand, planned business expansions, and ongoing operational improvements.
OSL take:
Sri Lanka’s growing economic activities and overall expansion in the economy are further evident by the expansion recorded by the country’s manufacturing and services PMI. With Sri Lanka poised as an emerging business destination in the region with a target of achieving regional hub status backed by the country’s strategic positioning in the Indian Ocean, strong trade ties with many foreign countries and an increasing business conducive environment, the country has become the ideal destination for foreign businesses/investors looking at expanding into the Asian region. While the growing economic activities have presented business/investment opportunities for foreign businesses/investors on the lookout for lucrative ventures in the region, Sri Lanka could also serve as the base for many foreign businesses/investors interested in increasing operations in the Asian region with special focus on the South Asian region. The growth and profits recorded by a strong and resilient private sector as well as local and foreign collaborations in the country and the increasing interest among foreign businesses/investors to explore opportunities in Sri Lanka indicate the increasing business potential in the country. Foreign businesses could also look at entering Sri Lanka and expanding operations through local collaborations.
| Article Code : | VBS/AT/20260319/Z_2 |