November PMI signals continued expansion in manufacturing & services

• PMI for manufacturing recorded an index value of 53.3 in November
• Services sector recorded an index value of 60.5, rising slightly from 60.3 in October
• Expectations for next 3 months grew, driven by ongoing tourist arrivals, festive season

Sri Lanka’s economic activities across both the manufacturing and services activities continued to expand during November. 

This is both as a reflection of the continuous recovery in the economy as well as the year-end seasonal pop seen in the demand for both goods and services, which is further supported by the lower interest rates and cooler prices.

The Purchasing Managers’ Index (PMI) for manufacturing recorded an index value of 53.3 in November, signalling continued expansion in activities in the sector, despite a slight slowing from October, for which the index value was 58.1.

The services sector recorded an index value of 60.5, rising slightly from 60.3 in October.

In the PMI, an activity is split between an expansion and a contraction at an index value of 50.0.

The textiles and wearing apparel sector showed new orders during the month, as the shipments from Sri Lanka’s major apparel clients in the West rose, which was also reflected in the growth in the export earnings from the sector as of late.

The United States economy showed resilience, as the consumer and retail spending remained high, with inflation coming down there while in Europe, the borrowing costs are also being cut, helping to accelerate their relatively weak economy.

Further, the production sub-index expanded, mainly due to the food and beverage sector while the employment and stock-of purchases remained expanded, aligning with the new orders and production sub-indices.

The participants in the manufacturing sector remained upbeat over the next three months, although there were some concerns from those who engage in the food manufacturing, due to the limited supply of key raw materials.

Meanwhile, the services sector received a bump up from the increased lending activities as the rates came down while the demand for loans also started rising with the broad-based growth in the economy.

The business activities in the accommodation, food and beverage sectors showed a considerable improvement, due to the increased tourist arrivals.

The wholesale and retail trade activities also increased ahead of the festive season, despite the adverse impact from the unfavourable weather on sales.

Employment in the sector increased to accommodate the growing economic activities, with the increased tourist arrivals and festive season.

The expectations for the next three months grew at a higher pace, driven by the ongoing tourist arrivals and the festive season.