Sri Lanka manufacturing, services pick up September 2020 before new Covid-19 cluster: PMI
ECONOMYNEXT – A Purchasing Managers’ Index of 59.8 for September 2020 showed manufacturing activities rising 1.9 points faster rate than in August, though import restrictions continued to hit activities, while a services index was also above 50 indicating expansion.
“Some respondents in the manufacturing of food & beverages and textiles & wearing apparel sectors highlighted that their factories operated at full capacity receiving more new orders with the normalisation of business activities,” the central bank which compiles the index said.
“Further, the Employment sub-index increased in line with these developments.”
“Some respondents highlighted that the restrictions imposed on importation of some categories of goods continued to affect the smooth functioning of manufacturing activities.”
However future expectations had fallen with the onset of a new cluster of Coronavirus though they were running at full capacity in September.
“The sub-index of overall expectations for manufacturing activities for the next three months declined significantly due to the prevailing situation of spreading of COVID-19 virus in the country, particularly centering to some manufacturing zones.”
The Services PMI was at 54.3, down 1.7 points from August but above 50, indicating improvements for the fourth month running.
“New Businesses, particularly in financial services and insurance sub-sectors, improved in September 2020 with the gradual normalisation in economic activities,” the central bank said.
“Employment sub-index almost reached 50-threshold level in September 2020 after a continuous decline in employment for seven months.
“Backlogs of Work continued to remain in the negative territory indicating that any increase in demand can be met with the existing capacity.”
The resurgence of Covid-19 cluster was also hurting services sector expectations.
“Expectations on future Business Activities increased further in September 2020, with the positive sentiments prevailed on the recovery of economy in the second half of the year,” the report said.
“Nevertheless, some respondents expressed concerns on realisation of their expectations due to the re-emergence of the risk of spreading COVID-19 virus in the country.” (Colombo/Oct16/2020)