Manufacturing and services activities expand in March

The manufacturing and services activities expanded in March as per the Purchasing Managers’ Indices (PMIs) for the month. 

According to the Central Bank, the Sri Lanka Purchasing Managers’ Index for Manufacturing (PMI – Manufacturing) recorded an index value of 62.5 in March 2024, indicating an expansion in manufacturing activities. This marks the highest PMI-Manufacturing that was recorded in three years. All the sub-indices expanded on a month-on-month basis contributing to this increase, mainly driven by the seasonal demand.

The increase in new orders and production was mainly attributable to the manufacture of food and beverages and textiles and apparel sectors. Most of the manufacturers, especially in food and beverage sector, were optimistic about the upcoming festive season. 

Employment and stock of purchases increased during the month in line with the new orders and production. Further, a decline in price levels was also evident. Meanwhile, suppliers’ delivery time remained lengthened, yet at a slower rate in March.

“The industry expectations for the next three months remain positive. However, most of them expect a natural decrease in production during April following the end of seasonal peak,” CBSL said. 

It also said the Sri Lanka Purchasing Managers’ Index for Services (PMI – Services) indicated a further expansion in services activities in March 2024 as reflected by the Business Activity Index, which recorded an index value of 67.7.

The continued expansion in Business Activities was driven by the improvements observed across most of the sub-sectors. Accordingly, the wholesale and retail trade sub-sector experienced a significant uptick attributed to increased sales ahead of the festive season. 

Further, business activities in the financial services subsector continued to grow supported by the accommodative monetary policy stance. 

The accommodation, food and beverage sub-sector continued to grow driven by high tourist arrivals, while transportation, other personal activities and professional services sub-sectors also recorded positive developments during the month.

“New Businesses increased in March, particularly with the increases observed in wholesale and retail trade, financial services, insurance, transportation and professional services sub-sectors,” CBSL said. 

It said employment increased due to new recruitments made by several companies in view of the festive season. Backlogs of Work continued to decline, yet at a slower rate, during March.

“Expectations for Business Activities for the next three months continued to rise supported by favourable macroeconomic conditions,” CBSL added.