Industrial production picks up in tandem with easing restrictions

Sri Lanka’s Index of Industrial Production (IIP), a key gauge of the country’s industrial sector dynamism, which dipped in September, picked up in October, as the country lifted its virus-related lockdowns, unshackling the industrial activities.
Accordingly, the IIP added 9.2 index points between September and October to record an index value of 109.5. 
The index, on a year-on-year basis level, also stretched from 107.8 index points, reflecting an annual expansion in the country’s broader manufacturing activities in the year through October 2021. 
Meanwhile, on a month-on-month basis, the seasonally adjusted IIP, which smoothens out seasonal variations, added 0.1 basis points to 104.4 index points in October, based on the 12-month moving average, from 104.3 index points in September. 
The 12-month moving average reflects the underlying cyclical trend of an index during the past 12 months, as it removes any unusual spikes and slumps.  
Among the seven key major sub-divisions, which typically move the IIP the most— food products, beverages, wearing apparel, rubber and plastic products and other non-metallic mineral products— pushed up the index in October.
What weighed on the index during October were coke and refines petroleum products manufacturing and manufacturing of chemical and chemical products.  
The composite wearing apparel sub-index consisting of manufacturing of textiles and wearing apparels continued to make advances on strengthening order books from their clients in the West.

Sri Lanka’s consumer inflation hit a 13-year high in November, as the prices escalated 9.9 percent in the 12 months to then. 
The October industrial production also stayed in line with the manufacturing sector PMI for the month and the merchandise exports, which recorded the highest ever October value.