June PMI signals expansion in manufacturing, services says CBSL

The country’s manufacturing and services sectors in June have expanded as per the Purchasing Managers Index (PMI) its compiler, the Central Bank said.

The manufacturing PMI recorded an index value of 56.6 in June. In May the value was 58.2.

“All  the sub-indices, except for employment, remained above the neutral  threshold during the month,” CBSL said.

It said the expansion in New Orders and Production was mainly due to the growth in the manufacture of food and beverages sector. Stock of  Purchases also expanded, in line with the increase in New Orders and  Production. 

However, Employment remained contracted during the month, as the firms are still cautious about refilling the vacant positions. Suppliers’ Delivery Time further lengthened in  June, mainly attributable to the congestion in the major shipping  ports.

CBSL said the industry expectations for the next three months indicate an  improvement, anticipating a gradual recovery in economic conditions.

The PMI for Services indicated a further expansion in services  activities in June 2024 as reflected by the Business Activity Index, which recorded an index value of 63.5. In May the index value was 55.0.

CBSL said the expansion in Business Activities was driven by the  improvements observed across most sectors. Business activities in  the wholesale and retail trade grew due to the Haj festive season.

Further, business activities in the transportation services, financial  services and other personal services also experienced a considerable  growth during the month. However, business activities in the  accommodation, food and beverages services remained at the same  level as in the previous month in line with the sluggish tourist arrival  during off-season.

New Businesses increased in June, particularly with the increases  observed in financial services and other personal service activities.

Employment increased in June due to new recruitments made by  several companies. Meanwhile, Backlogs of Work continued to  decline during the month.

CBSL said expectations for Business Activities for the next three months  continued to improve, at a higher rate, supported by favourable macroeconomic conditions.