Sri Lanka manufacturing, services sector growth slows in Feb
Mar 19, 2019 12:28 PM GMT+0530 | 0 Comment(s)
ECONOMYNEXT- Sri Lanka's manufacturing and services sector growth slowed down in February from January, state data showed.
The Sri Lanka Purchasing Managers' Index (PMI) compiled by the Central Bank fell 3.8 index points to 50.6 points in February for the manufacturing sector.
An index value over 50 signifies an increase compared to the previous month.
"Manufacturing activities increased at a slower rate in February 2019 compared to January 2019, mainly driven by the decrease in new orders and production, especially in manufacturing of textiles, wearing apparels, leather and related activities," the Central Bank said.
The new orders sub-index fell to 48.5 points in February from 54 points in January while production fell to 48 points from 55.5 points.
"This decline was mainly due to the lesser number of working days in February," the Central Bank said.
"Stock of purchases also decreased during the month in line with the decrease in new orders and production."
Employment was seen increasing in February due to the upcoming festive season in April, while raw material supply time lengthened over the Chinese New Year holiday season, the Central Bank said.
The global manufacturing PMI also recorded a 50.6 value in February, falling 0.1 points from January.
Manufacturing in Eurozone, UK, USA, Singapore and Russia slowed down, while China and India recorded growth, the Central Bank said.
The services sector PMI in Sri Lanka fell 2.8 points to 53 points in February, reversing a trend seen over two consecutive months.
The new business sub-index slowed down to 55.3 points in February from 57.7 points in January, while expectations for activity decelerated to 60.5 points from 64.4 points.
"Both new businesses and expectations for activities slowed down due to many people taking a wait and see approach as there is an uncertainty in the business climate," the Central Bank said.
"Expectations in the wholesale and retail trade sub sector deteriorated due to new vehicle duty reforms introduced in the Budget 2019."
The business activity sub-index fell to 54.7 points from 56.7 points, but expansions were seen in financial and transportation industries due to technology-based improvements and export growth, the Central Bank said.
Employment was seen slowing down to 51.1 points from 57.4 points, as many are focusing on business process automation and artificial intelligence, the Central Bank said.
"Prices charged in the services sector increased at a slower rate while the expected labour cost in the services sector also increased at a slower pace."
Globally, the services sector PMI grew to 53.3 points in February, recovering from a 28-month low 52.6 points in January, accelerating a 115-month growth trend.
Services sectors of Japan, China, UK, India, and the USA recorded growths in February. (Colombo/Mar19/2019-SB)