Manufacturing, services pick up in December as per PMI

Monday, 20 January 2025 05:59 - - {{hitsCtrl.values.hits}}

The country’s manufacturing and services sectors saw a rebound in December, as per the Purchasing Managers’ Index (PMI) compiled by the Central Bank of Sri Lanka (CBSL).

The PMI for Manufacturing (PMI – Manufacturing) recorded an index value of 57.2 in December 2024, indicating a further expansion in manufacturing activities. All sub-indices, except Employment, contributed positively to this improvement. In November, it expanded by only 53.3 as opposed to 58.1 in October.

The CBSL said the New Orders and Production sub-indices increased further in December, bolstered by sustained production orders during the festive season, particularly in the food and beverages manufacturing sector. However, New Orders and Production sub-indices in the manufacture of textiles and apparel sector decreased during the month, owing to decline in orders from major garment export destinations during the seasonal winter holidays.

This resulted in a reduction of casual labour in the textiles and apparel sector, mainly contributing to the decline in the overall Employment sub-index.

The Stock of Purchases sub-index continued to expand during the month, while the Suppliers’ Delivery Time sub-index remained lengthened.

Expectations for manufacturing activities for the next three months indicate an improvement, anticipating better economic conditions.

The Sri Lanka Purchasing Managers’ Index for Services (PMI – Services) indicated a significant expansion in services activities in December 2024, as reflected by the Business Activity Index, which recorded an index value of 71.1. The Services PMI was 60.5 in November, as opposed to 60.3 in October.

The CBSL said the notable expansion in business activities was driven by improvements observed across most of the sectors. Accordingly, wholesale and retail trade business activities posted a strong growth during the festive season and the peak of tourist season. Further, business activities in the financial services experienced a significant improvement amid increased lending activities. Meanwhile, other personal service activities, such as leisure activities, also improved with the holiday season.

New Businesses increased in December 2024, primarily due to significant expansions in the financial services, wholesale and retail trade, and other personal service activities.

Employment increased amid recruitments made to accommodate growing economic activities driven by increased tourist arrivals and the festive season. The Backlogs of Work increased in December 2024.

Expectations for business activities for the next three months continued to improve, although at a slower pace, supported by favourable macroeconomic conditions.