Sri Lanka’s manufacturing and services sectors show improvement in June
The Purchasing Managers Index (PMI) compiled by the Central Bank of Sri Lanka (CBSL) has reportedly recorded improved activities in the manufacturing and services sectors in June.
The CBSL has reportedly stated that manufacturing activities had recovered marginally during June 2021 from the adverse impacts of the third wave of the Covid-19 pandemic.
The manufacturing PMI recorded an index value of 50.4 in June 2021 with an increase of 8.3 index points from the previous month, mainly driven by the strong recovery seen in New Orders, according to reports.
All the other sub-indices, except Suppliers’ Delivery Time, edged up from the previous month and the New Orders, especially in the Manufacture of Food and Beverages sector, increased significantly, local media reports have stated.
The Production, Employment, and Stock of Purchases sub-indices, mainly related to the Food and Beverages sector had edged up compared to the previous month yet remained below the neutral threshold level, owing to the disturbances from the third wave of the pandemic.
However, the textile and wearing apparel sector indicated a deterioration in June, as reflected from the further decline in New Orders, Employment, and Stock of Purchases sub-indices, local media reports have further stated.
The Suppliers’ Delivery Time had continued to lengthen in June 2021, yet at a slower pace, with the ease of travel restrictions in the domestic front.
According to reports, expectations for manufacturing activities for the next three months have significantly increased with the anticipation that the economic activities would normalise in the coming months supported by the rapid rollout of the Covid-19 vaccination across the country, particularly in the Western Province, and the easing of mobility restrictions.
The CBSL has further revealed that the Services PMI had returned to growth territory in June 2021, recording an index value of 51.3, after declining for two consecutive months. This improvement was reportedly mainly driven by the increase in expectations for activity supported by the relaxation of travel restrictions.
New businesses sub-index had reportedly improved in June 2021 compared to May 2021, particularly with the improvements observed in Education and Financial Services sub-sectors.
Also, the Business activities sub-index had reportedly improved in June in line with the relaxation of the travel restrictions towards the latter part of the month.
OSL take:
Sri Lanka’s economy has shown great resilience to external and internal challenges through the years and is once again on the path to recovery after facing the impact of the global Covid 19 pandemic. Several sectors of the country’s economy has sown a positive growth even amidst the Covid pandemic. This is indicative of the strength and growth of the country’s economy. The government of Sri Lanka is also engaged in an aggressive development programme aimed at taking the country to the next level of development. Also, Sri Lanka is fast becoming a business hub in the South Asian region given its geographical positioning in the Indian ocean and the many trade agreements as well as trade concessions enjoyed by the country. Foreign businesses/investors could therefore explore the growing opportunities in Sri Lanka.
| Article Code : | VBS/AT/20210720/Z_1 |