Sri Lanka’s manufacturing and services sectors maintained expansion in November, reinforcing their role as key drivers of economic activity, even as growth softened from the previous month, Central Bank data show.
The Manufacturing PMI eased to 55.5 in November from 61 in October, reflecting slower but sustained expansion. Analysts view this moderation as a natural adjustment following strong October performance rather than a sign of weakening fundamentals. The manufacturing sector continues to support employment, exports, and domestic supply chains, particularly through food processing and apparel manufacturing.
CBSL reported that new orders expanded across the sector, largely driven by increased demand for food and beverage products and textiles and apparel ahead of the festive season. While production remained at neutral levels, firms increased hiring and purchases of raw materials, signalling confidence in near-term demand.
Extended supplier delivery times pointed to persistent input demand, suggesting that manufacturing activity remains resilient despite logistical and weather-related challenges. Importantly, business expectations for the next three months remain positive, with seasonal demand expected to offset recent disruptions.
In contrast, the services sector experienced a sharper slowdown. The Services PMI declined to 50.5 in November from 66 in October, indicating marginal growth. Adverse weather conditions disrupted transport, tourism, and retail activity, particularly towards the end of the month.
Nonetheless, accommodation, food, and beverage services continued to expand, reflecting sustained tourism-linked activity and domestic consumption. Financial services also strengthened further, supported by increased lending, underscoring the sector’s contribution to investment flows and credit-driven economic recovery.
New business formation increased, supported by financial services and wholesale and retail trade, while employment growth continued as firms hired to meet seasonal demand. The increase in backlogs of work, after several months of decline, suggests rising operational pressure as activity stabilises.
CBSL noted that expectations for business activity over the next quarter remain favourable, though at a moderated pace. While weather-related risks and demand volatility remain concerns, relatively stable macroeconomic conditions and expected festive spending continue to underpin confidence across both sectors.
Taken together, November PMI data suggest that while momentum has slowed, Sri Lanka’s manufacturing and services sectors remain on a recovery path, continuing to support growth, jobs, and economic stability as the year draws to a close.
