• Census and Statistics Department revises 2Q growth to 2.7%
• Industries jump to 6.8%, Services 4.7% but Agriculture records negative growth of 1.9%

Sri Lanka’s economy rebounded from a disappointing second quarter performance to record 4.1% growth in the third quarter, with April to June growth also being revised up to 2.7% from 2.6%, the Census and Statistics Department said yesterday.  

The four major components of the economy – Agriculture, Industry, Services and Taxes – less subsidies on products have contributed their share to the GDP at current price by 7.6%, 30.5%, 56% and 5.9% respectively in the third quarter of 2016, the department said in its statement.  

During the third quarter of 2016, especially the industrial activities have recorded a significant increase in overall growth rate as 6.8%, meanwhile the Services activities have grown by 4.7%, compared to the third quarter of 2015. However, the agricultural activities reported 1.9% of negative growth rate.

Among the sub-activities of Agriculture, the value added of ‘Growing of tea’, ‘Growing of rice’ , ‘Growing of rubber’, ‘Growing of spices’ and ‘Growing of vegetables’ declined and reported negative growth rates of20.4%, 20%, 17.8%, 9% and 7.2% respectively during this quarter, when compared to the same quarter in the previous year. 

Meanwhile the ‘Forestry and logging’ and ‘Fresh water fishing’ grew significantly by 30% and 20.8% respectively during the third quarter of 2016. ‘Marine fishing’ and ‘Animal production’ also reported 7.4% and 6.9% growth rates for the third quarter of 2016, while the ‘Growing of fruits’ and ‘Growing of oleaginous fruits; including ‘Coconut’ have shown only a slight increase in growth rates by 1.3%, and 0.1% respectively.

“The industrial activities which shared the GDP by 30.5% at current price, has recorded a significant growth rate in this quarter. The industrial activities have expanded by 6.8%. Among the industrial activities, the ‘Construction’ activity, which corresponds to a higher share of the industrial activities, increased by 14.4% during this quarter compared to the third quarter of2015. In addition, the sub activity of ‘Mining and quarrying’ recorded 13.5% of very high growth rate. During the third quarter of 2016, the manufacturing activities expanded by 2.7%,” the report added. 

Among the manufacturing activities, specially the ‘Manufacture of food, beverages and tobacco’ which gives the highest contribution to the GDP out of the industrial activities, grew by 2.6%, while ‘Manufacture of textile and wearing apparel’ and ‘Manufacture of rubber and plastic products’ grew by 3.3% and 5.8% respectively. The value added of ‘Electricity, gas, steam and air conditioning supply’ has increased by 7.8% over the period under consideration.

Among the three major activities, the Services activities which gave the highest contribution (56.0 percent) to the GDP growth, recorded a positive growth rate of 4.7% during the third quarter of 2016, when compared to the same quarter of the year 2015. The performance of Services sector was underpinned specially by the sub activities of ‘Financial service activities’, ‘Insurance activities’, ‘Telecommunication’, ‘Education service’ and ‘Wholesale and retail trade’ which reported significantly higher growth rates of 12.9%, 12.3%, 11.7%, 10.2% and 4.6% respectively compared to the respective quarter in year 2015.

Manufacturing and Services PMI grow in November: CB

Indicating an economic upturn, the Central Bank yesterday said Manufacturing Sector PMI increased 1.9 index points in November along with a marginal increase of the Services PMI driven by new employment and increased production.   

The Manufacturing Sector PMI was 58.4 in November with an increase of 1.9 index points compared to October 2016 indicating that the manufacturing activities expanded in November compared to October, the Central Bank said in a statement. 

“This was mainly due to the higher pace in which Employment and Production sub-indices expanded during the month. The New Orders sub-index also increased during the month. The Stock of Purchases sub-index decelerated in November indicating a usage of stocks for the upcoming season while Suppliers’ Delivery Time lengthened,” it said.  

Overall data points to an expansion where all the sub-indices are above the neutral 50.0 threshold. The expectations for activities indicated an improvement for the next three months, according to the Central Bank. 

The Services Sector PMI increased to 59.7 index points in November from 59.3 index points in October 2016. The increase in PMI over the last month’s value indicates that economic activities in the Services sector continued to expand in November 2016 in comparison to the previous month.

“The increase in Services PMI was driven by expansion in Employment and Expectations for Activity sub-indices. New Businesses and Business Activity sub-indices decelerated in November 2016 compared to previous month.”

However, Backlogs of Work declined in November albeit at slower rate than October 2016. Prices Charged, which is not taken into consideration in PMI compilation process, increased at a higher rate in November 2016.