June PMI signals expansion in manufacturing, services says CBSL

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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.