ECONOMYNEXT – Sri Lanka’s factory production recovery gathered momentum in June with services also recovering from a record low after April’s suicide bombings as the Manufacturing Purchasing Managers’ Index rose 3.2 points to 53.9 from May.
“This expansion in manufacturing PMI is mainly attributable to the significant recovery in employment, especially, in manufacturing of food and beverages and textiles and wearing apparels sectors,” a central bank statement said.
This was from the lower employment availability experienced after the Easter Sunday attacks on churches and hotels by Islamist extremists.
The monthly Manufacturing Purchasing Managers’ Index (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.
Expansion in new orders and production, particularly in manufacturing of food and beverages, also contributed to the improvement of PMI in June 2019.
“Many respondents also highlighted that New Orders and Production recovered to a greater extent in June with the normalization of economic activities after the disruptions caused by the Easter Sunday attacks,” the statement said.
The Stock of Purchases increased considerably with the expansion of New Orders and Production.
The Suppliers’ Delivery Time lengthened at a slower rate as a combined outcome of increased demand for supplies of input and the gradual easing of tight security measures.
“All sub-indices of PMI Manufacturing exceeded the neutral 50.0 threshold signalling an overall expansion in manufacturing activities during the period under review,” the central bank said.
The services sector recovered in June 2019 from its lowest level in May 2019, which was mainly caused by the Easter Sunday attacks.
The recovery in services was mainly attributed to expansion in new businesses and business activity, and expectations for activity.
Respondents in accommodation, food and beverage, and other personal services sub sectors, which largely depended on tourist arrivals in the country noted that business activities were gradually picking up, the central bank said.
Expectations for activity also increased in June 2019 after declining for two consecutive months.
(COLOMBO, 15 July, 2019)