Sri Lanka Manufacturing and Services activities expand in October 2021
Wed, Nov 17, 2021, 01:02 pm SL Time, ColomboPage News Desk, Sri Lanka.
Nov 17, Colombo: Both manufacturing and service sectors of Sri Lanka expanded in October 2021, the Central Bank’s Purchasing Managers’ Index (PMI) Survey released Tuesday showed.
Indicating a strong revival in manufacturing activities in the country, Manufacturing PMI reached a 7-month high at 60.4 in October 2021 with an increase of 6.1 index points compared to the previous month.
This increase in manufacturing PMI was attributable to the increases observed in all the sub-indices.
Significant increases were observed in New Orders and Production, particularly in the manufacture of food & beverages and textiles & apparel sectors during the month.
Meanwhile, Employment also increased during the month compared to the previous month with the relaxation of travel restrictions in the country.
The continuous increase in the cost of imported raw materials, mainly due to rising global commodity prices, has been highlighted as a major concern by most of the respondents in all sub-sectors.
In the next three months, expectations for manufacturing activities remain at higher levels anticipating further improvements in economic condition locally and globally.
Services PMI increased to 57.9 in October 2021 underpinned by the increases in New Businesses, Business Activities and expectations for Activity sub-indices. This is the strongest rate of growth in services PMI, which was observed since March 2021.
New Businesses increased in October compared to the previous month mainly with the improvements observed in financial services, transportation, education, insurance, professional services, real estate and telecommunication sub-sectors.
Employment sub-index continued to remain in the negative territory with retirements and voluntary resignations exceeding the number of new recruitments. Meanwhile, Backlogs of Work decreased in October for the first time since March 2021 as a majority of staff reported to work after the relaxation of travel restrictions.
Expectations for Business Activities for the next three months increased in October following the relaxation of pandemic related restrictions and favorable expectations on demand side developments in the upcoming festive season.