Friday Nov 15, 2024
Friday Nov 15, 2024
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The country’s manufacturing and services sector expanded in December as per the Purchasing Managers Index (PMI) compiled by the Central Bank.
CBSL said the manufacturing PMI indicates that manufacturing activities sustained the expansion on a month-on-month basis in December 2021, recording an index value of 58.1 mainly due to the expansion in New Orders and Production.
It said all the sub-indices, except Employment, increased during the month. The expansion in New Orders and Production was mainly driven by seasonal demand for the food and beverage manufacturing sector.
New Orders and Production in the manufacture of textile and wearing apparel sector also showed an improvement, yet at a slower pace.
However, Employment sub-index declined in December compared to November 2021. The Stock of Purchases increased at a slower pace compared to the increases in New Orders and Production.
“Many respondents mentioned that although they wanted to build up stocks significantly ahead of the Chinese New Year holidays, they were able to do it only to a certain extent due to import related issues,” CBSL added.
It said Suppliers’ Delivery Time lengthened at a higher pace in December 2021. Delays due to port congestions, increase in orders ahead of the Chinese New Year holidays, and shortage of local raw materials were among the major causes of lengthening the Suppliers’ Delivery Time.
In the next three months, expectations for manufacturing activities remain at higher levels anticipating continuous improvements in economic condition locally and globally.
CBSL also said the services sector PMI edged up to an index value of 62.4 in December marking a strong end to 2021. This increase was underpinned by the increases observed in New Businesses, Business Activities, Employment and Expectations for Activity sub-indices.
New Businesses rose further in December compared to the previous month with the improvements observed across most of the sub-sectors.
Business Activities in the Services sector indicated a stronger growth in December in line with the continued improvements in demand amid the normalisation of economic activities and the festive season. Accordingly, business activities improved across most of the sub-sectors, where major improvements were observed in financial services, transportation, wholesale and retail trade and other personal activities sub-sectors.
Business activities in accommodation, food and beverage sub-sectors also recorded a significant improvement amid the festive season and the considerable growth in international tourist arrivals.
Employment rose further in December as companies continued to expand their workforce owing to the positive developments in their business activities.
CBSL said backlogs of work continued to decline in December in line with staff reporting to work as usual. Expectations for Business Activities for the next three months improved further in December supported by the improved perceptions amid expectations on continuity of relaxed pandemic related restrictions. Nevertheless, some respondents mentioned that the business outlook continues to remain uncertain due to the challenging economic environment amid inflationary pressures stemming from supply constraints and the potential impact of new variants of COVID-19.
