Manufacturing activities slow considerably in April following seasonal pattern

• Services sector PMI slightly below neutral threshold, recording an index value of 49.6 

Following the seasonal pattern, Manufacturing PMI decreased to 34.7 in April 2023, indicating a month-on-month contraction in manufacturing activities. Accordingly, the Production, New Orders, Employment and Stock of Purchases sub-indices declined during April compared to the seasonal peak in March. 
As per the respondents, the decline in Production was primarily due to the temporary closure of most of the factories in April, owing to the Sinhala and Tamil new year holidays. 
Decline in New Orders, particularly in the manufacture of food and beverages, was mainly due to the end of the festival season demand. In addition, some respondents in the manufacture of textiles and apparel sectors mentioned that they observed a continuation of the subdued global demand conditions, resulting in a decline in New Orders. 
Further, Employment and Stock of Purchases also declined in line with the declines in New Orders and Production. Meanwhile, Suppliers’ Delivery Time slightly lengthened in April 2023, compared to the previous month, on a month-on-month basis. 

Expectations for manufacturing activities for the next three months indicated an improvement, anticipating a favourable development in the economic environment. 
Services sector PMI remained slightly below the neutral threshold, recording an index value of 49.6 in April 2023, led by the decreases observed in New Businesses, Employment and Backlogs of Works. Nevertheless, Business Activities and Expectations for Activity continued to increase during the month. 
New Businesses declined in April 2023 compared to March 2023, particularly with the decreases observed in the insurance, transportation and postal and courier activities sub-sectors. 
Business Activities in the services sector continued to grow, yet at a slower rate, in April. Accordingly, business activities in the other personal activities sub-sector exhibited a considerable improvement amid the festive season. Further, the education and telecommunication sub-sectors also recorded slight increases during the month. Meanwhile, the business activities related to the wholesale and retail trade sub-sector remained stagnant despite the festive demand and seasonal discounts. 
Employment continued to decline in April at a higher pace, due to resignations, migrations and retirements, despite few new recruitments took place during the month. Meanwhile, Backlogs of Work also decreased at a higher rate during the month. 
Expectations for Business Activities for the next three months remained improved in April, driven by positive sentiments regarding improvements in the macroeconomic conditions.