Manufacturing kicks off 2025 with improvement; services lag

Monday, 24 February 2025 05:33 - - {{hitsCtrl.values.hits}}

The manufacturing sector has kicked off 2025 with an improvement in January as against December, whilst the services industry has lagged, as per the Sri Lanka Purchasing Managers’ Index (PMI).

Its compiler, the Central Bank of Sri Lanka (CBSL), said the PMI for Manufacturing recorded an index value of 59.0 in January 2025, indicating a further expansion in manufacturing activities. All sub-indices contributed positively to this improvement. In December 2024, the index value was 57.2.

Most of the survey participants from the manufacture of textiles and apparel sector reported favourable developments in January, driving expansions in the New Orders, Production, Employment, and Stock of Purchases sub-indices. In addition, the manufacture of food and beverages sector continued to remain positive, even after the December festival season. Meanwhile, the Suppliers’ Delivery Time sub-index further increased in January, in line with the increase in activity levels.

The outlook for manufacturing activities for the next three months remains positive, anticipating improved business conditions, according to the CBSL.

Sri Lanka Purchasing Managers’ Index for Services (PMI – Services) recorded an index value of 58.5 in January 2025, indicating a slower expansion in services activities. In December 2024, the index value was 71.1.

The expansion in Business Activities was driven by improvements observed across most of the sectors. Accordingly, business activities in the financial services sector continued to improve supported by increased lending activities. Further, business activities in the accommodation, food and beverage sector also showed a considerable improvement during January 2025 driven by a steady growth in tourist arrivals. Meanwhile, education, professional services, and transportation-related business activities also recorded improvements during the month.

New Businesses increased in January 2025, primarily due to expansions observed in the financial services, transportation, and accommodation, food and beverage related activities.

Employment continued to increase amid recruitments across many companies. Meanwhile, Backlogs of Work declined on a month-on-month basis, following the increase recorded in the previous month.

Expectations for Business Activities for the next three months continued to improve amid expected seasonal demand and favourable macroeconomic conditions, the CBSL said.

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