ECONOMYNEXT – Sri Lanka’s manufacturing sector has continued to slow down in December while services sector businesses have seeing an expansion according to a Purchasing Managers’ Index compiled by the central bank.
The manufacturing PMI was still below 50 at 44.8 percent mainly due to a decline in new orders and production in textile and wearing apparel sector.
“The decline in New Orders and Production was mainly driven by manufacturing of textile & wearing apparel sector. Subdued foreign demand due to seasonal holidays, and economic slowdown experienced in major export destinations was the main reasons for this decline,” Central Bank said.
“Manufacturers mentioned that, although supply-side impediments such as high input cost and shortage of foreign exchange that affected importation of raw materials are yet to be resolved, demand slowdown due to deteriorated purchasing power of the customers was the key issue that restricted them from increasing production.”
However Central Bank said that the businesses are expecting the conditions to improve in line with the economy stabilizing.
The Services PMI returned to the growth territory in Decembert 2022, with an index value of 51.6 after falling for two months in a row.
“Business Activities in the services sector continued its upward trend in December 2022,” Central Bank said.
“In line with the increase in tourist arrivals during the month, business activities related to other personal activities and accommodation, food and beverages sub-sectors showed significant improvements.
“Further, insurance, telecommunication and financial services sub-sectors also showed some increases compared to the previous month.”
However, business activities related to wholesale and retail trade sub-sector deteriorated further during the month amid the continued cost of living challenges and shortages of certain items.