ECONOMYNEXT – Sri Lanka is seeing a fall in service sector employment, with migration adding to a general economic downturn and demand contraction following the worst currency crisis in the history of the island’s intermediate regime central bank.
“Employment continued to fall in November due to increasing resignations, migrations and retirements though few recruitments took place in several companies,” according to a Purchasing Manager’s Index compiled by Sri Lanka’s central bank for November.
November index was at 37.4 points which indicates a fall, though it was a smaller fall than indicated by October’s index of 33.9 points.
November was slightly better due to a pick-up in tourism, the central bank said.
“Further, in line with the increase in tourist arrivals, business activities in accommodation, food and beverages sub-sector also increased,” the statement said.
“However, business activities related to wholesale and retail trade sub-sector declined further during the month amid the continued cost of living challenges.”
Sri Lanka is seeing an increase in migration because of the lack of economic and political stability, and low salaries, other says.
“Migration in Sri Lanka is driven by low per capita income, unemployment and/or underemployment, high inflation, indebtedness, lack of access to resources, instability and lack of trust in the system,” an economist said.
Sri Lanka’s outward migrants had topped 300,000 by the third week of December Labour and Foreign Employment Minister Manusha Nanayakkara said on December 18 which is on track to being the highest on record.
Previous high of 300,000 came in 2014.
Sri Lanka is in the process of digitizing migration, in order to send skilled workers out of the country in a professional way, Labour and Foreign Employment Minister Manusha Nanayakkara said.
Sri Lanka’s construction sector is one of the hardest hit sectors in the current downturn.
Younger professionals in Sri Lanka’s construction sector are fleeing the country, an official said as the industry is in a deep downturn following the latest currency crisis triggered by the country’s intermediate regime central bank.
Real salaries have halved after macro-economists printed money for two years and busted the rupee from 200 to 360 to the US dollars and the inevitable stabilization policies that follow have pushed up interest rates slowing construction.
Other business leaders have also said they are seeing a migration.
“We are seeing a trend towards migrating. We have seen people go to Scotland, Ireland,” Krishan Balendra, Chairman of Sri Lanka’s John Keells Holdings told an economic policy forum on December 07.
“It has usually been the Middle East and Maldives. Australia seems like a red hot labor market at the moment.
“Something new we are seeing is that older people, even those in their 50s, which was a surprise, are looking at migrating.”
Businesses are trying to retain talent as real wages collapse by showing that there is path to progress. (Colombo/Dec30/2022)