Festive demand boosts Sri Lanka factory output, automation hits service jobs
ECONOMYNEXT – Sri Lanka’s factory production increased in October propelled by food and beverage manufacturing to meet festive demand while services also grew but without new jobs owing partly to automation, according to the Purchasing Managers’ Index (PMI).
Manufacturing PMI increased 2.9 points to 57.6 in October 2019 mainly due to increases in production and new orders compared to September 2019, a central bank statement said.
“The increase in production and new orders was observed especially in manufacturing of food and beverages sector to meet the upcoming festive season demand.”
Employment also increased in manufacturing of food and beverages and wearing apparel sectors.
“This was mainly due to the recruitment of new employees to increase the production levels to meet the higher demand in the period ahead.”
The monthly PMI, prepared from a survey of purchasing executives in large companies in the Western province, provides indications about current and future business conditions.
It is considered more valuable to investors than other economic indicators based on historical data.
An index value below 50 records a decline from a month earlier, and over 50 denotes a growth.
Services PMI increased 4.2 points to 56.9 in October 2019, mainly supported by strong growth in new businesses and business activities compared to September 2019.
“New businesses reached a 19-month high with financial services and insurance sectors dominating in securing new businesses,” the statement said.
“However, employment in the services sector continued to remain below the 50-threshold level for the seventh consecutive month, due to delays in recruitments and automation of manual work,” the central bank said.
(COLOMBO, 14 November 2019)