Sri Lanka manufacturing, services activities grow in July
Friday August 16, 2019 16:31
ECONOMYNEXT- Sri Lanka’s manufacturing and services activities grew in July 2019 from a month earlier, the central bank said.
The Purchasing Managers’ Index (PMI) compiled by the central bank showed the manufacturing sector PMI growing 1.8 points to 55.7 (an index value over 50 indicates a growth from the earlier month).
"This expansion in manufacturing PMI is mainly attributable to the significant increase in new orders and subsequent increase in production, especially, in manufacturing of food & beverages sector," a statement said.
"The increase in new orders was mainly due to the gradual recovery of the economy from disruptions related to Easter Sunday attacks."
Businesses were also seen increasing their stocks of inputs due to rising new orders and production.
Stockpiling was also seen due to production for the year-end festive season and as a precaution for possible disruptions to supply chains during the upcoming election period.
While Sri Lanka’s manufacturing PMI grew, the global PMI fell 0.1 points to 49.3, with a slowdown in USA and the Eurozone.
Meanwhile, Sri Lanka’s service sector PMI grew 4 points to 57.1 from June.
The central bank said that the services sector was showing a recovery from the Easter Sunday terror attacks.
"Business activities of wholesale and retail trade; accommodation, food and beverage; financial services; and transportation sub sectors expanded for the second consecutive month in July 2019."
"Service providers’ optimism on the next three months business outlook strengthened to a 29-month high, as expectations for activity expanded across most of the sub sectors."
However, services sector employment fell due to a lag in filling vacant positions and replacing labour shorages with technology-driven processes.
Expected labour costs grew due to routine salary increments.
"Respondents in financial services sub sector highlighted that they have reduced lending rates (prices charged) in parallel to the deposit rates reductions."
"Accordingly, Prices Charged in the Services sector declined in July 2019."
The global services PMI grew marginally to 52.5 points in July with stronger services output in US, UK, Japan, China and Italy, as well as a snapback in activity in India, Brazil and Russia. (Colombo/Aug16/2019)