Manufacturing and services expand in Feb. despite political uncertainty

Manufacturing and services sector activities expanded for the second month in a row in 2018 demonstrating that the economy is gradually gaining resilience despite the political uncertainties, which sent vibrations across the economy.

But the activities remained still weak compared to the end of last year.  Sri Lanka’s Purchasing Managers’ Index (PMI) for February showed the manufacturing activity pulling ahead with the index recording a 55.6 points in February compared to 51.7 points in January after the seasonal slowdown observed during previous month. 

The manufacturing sector PMI in December was 59.1 points. 

“This was mainly driven by the expansion in the New Orders sub-index. The Production sub-index also increased with the increase in new orders. 

Nevertheless, the increase was relatively low compared to that of new orders due to lesser number of working days in February,”the Central Bank said. 

Index number of 50 and above demonstrates an expansion in activity on a month on month basis. 

Meanwhile, the services sector PMI also recorded 58.4 index points in February from 56.6 index points in January 2016. 

“This indicates that the services sector gathered momentum in February 2018 supported by New Businesses, Business Activity, Employment and Expectations for activity”, the Central Bank added.

A sharp gain was observed in business activities of the financial services, IT programming, and transportation of goods and warehousing sectors.