Purchasing Managers’ indices indicate manufacturing, services activity expansions in July

Sri Lanka Purchasing Managers’ Index for Manufacturing (PMI – Manufacturing) recorded an index value of 59.5 in July 2024, indicating a continuous expansion in manufacturing activities. 
All sub-indices contributed positively to this improvement.
The increase in New Orders was driven by the manufacture of textiles and apparel sector. Moreover, Production increased during the month, mainly due to the improved performance in the manufacture of food and beverages and textiles 
and apparel sectors. 
Employment turned positive in July, which was mainly attributable to the manufacture of textiles and apparel sector. Stock of Purchases also expanded in line with the increased demand for materials. Meanwhile, Suppliers’ Delivery Time further lengthened in July.
Expectations for the manufacturing activities for the next three months remain positive, anticipating a continuous improvement in demand.
Sri Lanka Purchasing Managers’ Index for Services (PMI – Services) indicated a further expansion in services activities in July 2024 as reflected by the Business Activity Index, which reached an index value of 71.1, the highest value recorded so far this year. The expansion in Business Activities was driven by the improvements observed across a majority of sectors. Business activities in the transportation services grew mainly due to improvements observed in freight and aviation sectors. Further, business activities in the wholesale and retail trade and other personal services also experienced a considerable growth during the month.
Moreover, business activities in the accommodation, food and beverage services, which had shown a subdued performance in previous months, experienced an improvement during the month due to the increase in 
tourist arrivals.
New Businesses increased in July, particularly with the upsurges observed in financial services and transportation service activities.
Employment declined in July despite a few new recruitments made by several companies. Meanwhile, Backlogs of Work continued to decline during the month.
Expectations for Business Activities for the next three months continued to improve, at a higher rate, supported by favourable macroeconomic conditions.