ECONOMYNEXT- Sri Lanka's manufacturing and service sectors grew faster in October 2018 from a month earlier, outpacing global averages of the Purchasing Managers' Index (PMI), the Central Bank said.
The October manufacturing sector PMI grew to 58.2 points, up from 4.1 points in September, compared to 52.1 points in the global PMI, which was down 0.1 points.
Index values of over 50 show a growth.
"The improvement observed in manufacturing activities in October was mainly driven by the improvement in new orders and production, especially in manufacturing of food and beverages activities, led by the positive outlook with the seasonal demand," the Central Bank said.
The new orders sub-index grew to 59 points, up 5 points from a month earlier.
Production grew to 61 points, up 7.5 points.
Employment in the sector slowed down 0.5 points to a 55 index value.
"Even though the employment in the manufacturing of food and beverages activities has improved with seasonal trend, overall employment slowed down," the Central Bank said.
This was mainly evident in manufacturing of textiles, wearing apparels, leather and related activities due to difficulties to find employees in the market."
Supplier delivery time was flat at 54 points.
Furniture manufacturers stocking up supplies to cater to the coming holiday season saw stock purchases grow 5 points to a 61 index value.
Service sector PMI grew 2.5 points to 55.5, while the global PMI read 53.4, up 0.5 points.
Business activities sub-index grew 6.1 points to 57.1, while new business grew 3 points to 58.2 and expectations for activity grew 4 points to 63.6.
"The expansion in business activities was seen mainly across financial services and transportation and warehousing sub sectors," the Central Bank said.
"However, respondents cited that the depreciation of the local currency had an adverse impact on import volumes and thereby on their activity growth."
"New businesses also expanded across financial services and professional services sub sectors."
Employment sub-index was up 1.2 points to 55.4 due to growing business activities.
"Service providers’ optimism on the three months business outlook strengthened in October 2018 due to upcoming festive season and the peak season for tourism."
"However, respondents raised concerns over the current political situation and the weakening of the domestic currency which could moderate the realisation of expectations."
"Prices charged of the services sector increased at a higher rate while the expected labour cost in the services sector also increased during October due to bonus payments." (Colombo/Nov17/2018)