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Monday June 3rd, 2024

Sri Lanka’s services sector continues fall in May, production shows recovery

ECONOMYNEXT- Sri Lanka’s service sector continued its fall seen in April following the Easter Sunday attack, while the manufacturing sector showed some recovery, the central bank said.

The Purchasing Managers’ Index (PMI) for the services sector for May fell 0.6 points to 44.7 points.

An index value below 50 records a decline from a month earlier, and over 50 denotes a growth.

The services sector PMI in Sri Lanka had not fallen in Sri Lanka since it began in 2015, until the Easter Sunday attack took place in April.

The services sector accounts for two thirds of Sri Lanka’s economy.

The biggest contribution to the services PMI decline was from the employment sub index, falling to 36.4 points in May from 47.3 points in April.

"…it was mainly due to discontinuation of the service of contract employees with the deterioration in Business Activity, particularly in accommodation, food & beverage, and other personal services sub sectors," the central bank said.

The travel and hospitality industries were the worst affected by the bombings.

The central bank said that the Business Activity sub-index also fell dueto weaker wholesale and retail trade and transportation activity.

"Many respondents highlighted that uncertainty which arose from Easter Sunday attack still prevails in the country."

"Thus, New Businesses and Expectations for Activity continued to decline compared to previous month, yet at a slower pace."

Meanwhile prices charged for services continued to increase, but at a lower rate, as hotels, restaurants and other personal service businesses offered discounts, the central bank said.

Labour costs are expected to grow at a faster rate over the next three months, the central bank said.

Meanwhile, the manufacturing sector PMI recovered to 50.7 points in May from 41 points in April.

Usually the manufacturing PMI falls in April due to the long holiday season, but the fall in April 2019 was the worst since the index began in 2015.

The recovery in May 2019 was also below usual recovery seen in previous years.

"The recovery of manufacturing PMI is mainly attributable to the significant increase in Production and New Orders, especially, in manufacturing of textiles, wearing apparels, leather and related products," the central bank said.

"Many respondents, especially in textile and apparel sector, highlighted that they had to work extra hours on week days as well as in weekends during the month to clear the backlog of orders."

 Many workers living away from home due to work had returned home for the April holidays and remained there due to security concerns.

While new orders and production sub-indices recovered, the employment and stock purchases sub-indices fell.

"Employment contracted as a slight decline in new recruitments was observed, particularly, in manufacturing of food and beverages sector," the central bank said.

"Although, the New Orders expanded, the Stocks of Purchases continued to contract yet at a slower rate, due to the stocks of raw materials brought forward from the previous month."

"Suppliers’ Delivery Time lengthened at a slower rate due to security measures deployed after the Easter Sunday attack."

Meanwhile the global manufacturing PMI fell 0.6 points to 49.8 points in May. Manufacturing PMIs of USA, UK, Eurozone, Russia and Singapore fell, while in China it was flat, and growth was seen in India. (Colombo/Jun15/2019)

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Water levels rising in Sri Lanka Kalu, Nilwala river basins: Irrigation Department

Sri Lanka Navy assisting in rescue operations (Pic courtesy SL Navy)

ECONOMYNEXT – Sri Lanka’s Irrigation Department has issued warnings that water levels in the Kalu and Nilwala river basins are rising and major flooding is possible due to the continuous rain. People living in close proximity are advised to take precautions.

“There is a high possibility of slowly increasing prevailing flood lowline areas of Kiriella, Millaniya, Ingiriya, Horana, Dodangoda, Bulathsinhala, Palinda Nuwara and Madurawala D/S divisions of Ratnapura and Kalutara Districts, up to next 48 hours,” it said issuing a warning.

“In addition, flood situation prevailing at upstream lowline areas of Ratnapura district will further be prevailing with a slight decrease.

“The residents and vehicle drivers running through those area are requested to pay high attention in this regard.

“Disaster Management Authorities are requested to take adequate precautions in this regard.”

The island is in the midst of south western monsoon.

DMC reported that 11,864 people belonging to 3,727 families have been affected due to the weather in Rathnapura, Kegalle, Kilinochchi, Jaffna, Mullaitivu, Kalutara, Gampaha, Colombo, Galle, Matara, Hambantota, Puttalam, Kurunegala, Kandy, Nuwara Eliya, Anuradhapura, Polonnaruwa, Badulla, Moneragala, and Trincomalee districts.

Meanwhile, the Meteorology Department stated that showers are expected on most parts of the island today.(Colombo/June3/2024)

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UNP gen secy defends call for postponing Sri Lanka poll, claims opposition silent

The UNP party headquarters in Pitakotte/EconomyNext

ECONOMYNEXT — United National Party (UNP) General Secretary Palitha Range Bandara has defended his call for postponing Sri Lanka’s presidential election by two years, claiming that his proposal was not undemocratic nor unconstitutional.

Speaking to reporters at the UNP headquarters Monday June 03 morning, Bandara also claimed that neither opposition leader Sajith Premadasa nor National People’s Power (NPP) leader Anura Kumara Dissanayake have spoken against his proposal.

“I have made no statement that’s undemocratic. My statement was in line with provisions of the constitution,” the former UNP parliamentarian said.

He quoted Section 86 of Chapter XIII of the constitution which says: “The President may, subject to the provisions of Article 85, submit to the People by Referendum any matter which in the opinion of the President is of national importance.”

Sections 87.1, 87.2 also elaborates on the matter and describes the parliament’s role, said Bandara.

“I spoke of a referendum and parliament’s duty. Neither of this is antidemocratic or unconstitutional. As per the constitution, priority should be given to ensuring people’s right to life,” he said.

“Some parties may be against what I proposed. They may criticse me. But what I ask them is to come to one position as political parties and make a statement on whether they’re ready to continue the ongoing economic programme,” he added.

Bandara claimed that, though thee has been much criticism of his proposal for a postponement of the presidential election, President Wickremesinghe’s rivals Premadasa and Dissanayake have yet to remark on the matter.

“I suggested that [Premadasa] make this proposal in parliament and for [Dissanayake] to second it. But I don’t see that either Premadasa nor Dissanayake is opposed to it. To date, I have not seen nor heard either of them utter a word against this. I believe they have no objection to my proposal which was made for the betterment of the country,” he said. (Colombo/Jun03/2024)

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300 of 100,000 trees in Colombo considered high risk: state minister

ECONOMYNEXT – Trees in Sri Lanka’s capital Colombo are being monitored by the municipal council, Army and Civil Defense Force as the severe weather conditions continue, State Minister for Defense Premitha Bandara Tennakoon said.

“Within the Colombo Municipal Council city limits, there are 100,000 trees. Of these, around 300 are considered high risk,” Tennakoon told reporters at a media conference to raise awareness about the current disaster management situation.

Not all trees required to be cut down he said. “We can trim some of the branches and retain them.”

The problem was that buildings in the vicinity of the tree had cut branches on one side, causing it to become unbalanced, the minister said.

New laws would be brought in so provincial/municipal institutions could strengthen enforcement of building codes.

“We don’t have a single institution that can issue a warning about a tree. Not one to tell us what trees can or cannot be planted near a road.

“Trees should be suitable for the area. Some trees have roots that spread and damage roads, buildings. When the roots can’t go deep, they tend to topple over.

“Now Environment Day is coming up, and anyone can go plant a tree by the road. We have to take a decision about this. We have to enforce laws strongly in future.” (Colombo/June3/2024)

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