August 17, Colombo (LNW): Sri Lanka’s services sector recorded a marked upswing in July, as key industries such as retail, finance, and freight transport drove a significant increase in overall business activity, according to the most recent data from the Central Bank of Sri Lanka (CBSL).
The Services Purchasing Managers’ Index (PMI), a key indicator of sector performance, climbed to 70.1 in July, rising sharply from 61.9 in the previous month. This notable improvement suggests growing momentum in the country’s economic recovery, particularly within consumer-facing and logistics-related services.
Strong performances were observed in wholesale and retail trade, where business activity surged, reflecting heightened consumer demand and improved market conditions. The financial services sector also demonstrated continued resilience, underpinned by a rise in lending and broader improvements in banking activity. Freight transport services saw further gains, likely supported by increased movement of goods and improved supply chain operations.
In addition to these core sectors, several other service areas reported upward trends. Personal care services, postal and courier activities, digital broadcasting, telecommunications, and hospitality — including food and beverage services — all contributed to the overall sectoral uplift. Health care services also saw steady improvement, indicating a wider rebound in public and private demand.
The expansion of new business was particularly encouraging, with the corresponding index rising to 64.9 in July from 62.9 in June. This growth was largely attributed to heightened activity in trade and financial services, pointing to sustained investor and consumer confidence.
Labour market conditions within the sector improved as well, with the employment index increasing to 59.8 from 51.6, suggesting that businesses are actively recruiting to cope with growing demand. At the same time, firms reported a rise in unfinished workloads, indicating pressure on capacity despite the hiring boost.
Looking ahead, the outlook for the next quarter appears optimistic. According to the CBSL, expectations for future business activity have strengthened, buoyed by improving macroeconomic stability and a more favourable business environment across the country.
