ECONOMYNEXT- Sri Lanka’s manufacturing growth slowed in November on the apparel industry, while services growth accelerated during the holiday season, the Purchasing Managers’ Index (PMI) compiled by the central bank, showed.
The manufacturing PMI fell 1.6 percent in November to 56.0 points from 57.6 a month earlier. An index value over 50 signifies growth.
The central bank said slower expansion rate of all the sub-indices such as new orders, production and employment caused a fall in the manufacturing PMI.
“New orders and production expanded at a slower rate mainly due to the slowdown in manufacturing of textile and wearing apparel. Employment slowed down marginally in line with these developments,” the central bank said.
However, the stock purchases sub-index accelerated due to the intended accumulation of stocks to fulfil the future requirements anticipating supply delays from the upcoming Christmas and New Year holidays.
The global manufacturing PMI gained 0.5 percent to 50.3 points in November with higher growth in India, Singapore, China, the US and Europe, while a slowdown was seen in the UK and Russia.
The Sri Lankan services PMI reached a 16-month high of 57.4 index points in November, up 0.5 percent from October, mainly due to expansion of new businesses, new business activities and expectation for activity.
The expectations for activity sub-index grew 10 percent to 78.1 percent, which is the highest since June 2015.
“Respondents cited that they expect a greater stability in the political front, while being positive on their business growth underpinned by new tax revisions,” the central bank said.
“Further, the upcoming peak season for tourism, festive season and the holiday season are expected to contribute favourably towards their businesses during the period ahead.”
“New businesses increased, yet at a slower rate compared to the previous month, while business activities increased along with new technology based expansions.”
“The increase in business activities were notable in accommodation and financial services sectors.”
Sri Lanka’s tourism sector is recovering from the Easter Sunday bombings.
However, the index on employment of the services sector continued to remain below the 50-threshold level for the eighth consecutive month.
The global service PMI increased to a three month high in November to 51.6 on the back of India, the US, China and Japan, while a decline was seen in the UK. (Colombo/ Dec17/ 2019)