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Sri Lanka PMI rebounds strongly in June as Coronavirus controls relaxed

ECONOMYNEXT – Sri Lanka’s manufacturing and services Purchasing Manager’s Index (PMI) has rebounded strongly for the second month in June as the island relaxed Coronavirus restrictions after controlling the spread of the virus and economic activities normalized.

Employment in manufacturing improved, but services continued to show losses, with hiring halted.

The manufacturing PMI rose 18 points to 67.3 points rising above a 50 point threshold.

“This increase in manufacturing PMI is underpinned by the significant improvement in Production, New Orders and Employment, especially in the manufacturing of food & beverages and textiles and wearing apparels subcategories,” the Central Bank, which publishes the index, said.

“In line with the growth of New Orders, Production and Stock of Purchases also increased at a higher rate during the month.

“Employment sub-index increased beyond 50-threshold with improved manufacturing activities.

“As the COVID-19 outbreak adversely affected the global supply, the Suppliers’ Delivery Time continued to lengthen, albeit at a slower pace, during the period.

The Services PMI also rose above 50 to 50.4 points from 43.1 points in May.

“With the complete lifting of domestic travel restrictions, business activities in transportation sub-sector improved in June 2020 compared to the previous month,” the central bank said.

“Further, business activities related to wholesale and retail trade, financial services and other personal services also increased during the month.

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“However, respondents, particularly in transportation and accommodation, food and beverage sub-sectors, were concerned about the possible impact of the deterioration in international trade and prevailing international travel restrictions on their business activities.

Employment in services continued to fall with a halt of new recruitments.

But, expectations of future business activities increased in June 2020 indicating a further recovery in economic activities in the coming months. (Colombo/June15/2020-sb)