ECONOMYNEXT – Sri Lanka’s manufacturing has expanded for the second month in December 2023, and service maintained strong growth, driven by holiday demand and tourism, based on a Purchasing Managers’ Index compiled by the central bank.
The manufacturing PMI was 52.7 above the 50 points, but slightly the 57 point, expansion seen in November.
New orders and production increased but employment was down.
“The increases in New Orders and Production were driven by the manufacture of food & beverages sector with the seasonal demand,” the statement said.
“However, New Orders and Production in manufacture of textiles & apparel sector declined during the month, which mainly contributed to the decline in Employment as well.”
Expectations for the manufacturing activities for the next three months were positive.
“However, the firms are concerned about the impact of tax revisions from January 2024, and the shipping disruptions due to the unrest in the Red Sea,” the statement said.
The Services PMI was 58.9 percent, also sharply above 50, and close to 59.4 points in November.
“Accordingly, significant improvements were observed in business activities related to other personal service activities, transportation and accommodation, food and beverage sub-sectors, amid the festive and holiday seasons, and tourist arrivals reaching its peak,” the statement said.
“Further, wholesale and retail trade subsector showed a strong growth due to seasonal sales. Meanwhile, financial services also improved further in line with the increase in lending activities.” (Colombo/Jan17/2024)