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Manufacturing sector records three-year  high due to seasonal demand 

April 19, Colombo (LNW): Sri Lanka Manufacturing sector recorded the highest values recorded for March 2024 in three years, the latest data by the Central Bank shows.

Manufacturing recorded a Purchasing Managers’ index value of 62.5 in March, compared to 56 in February this year, it added. .

The Central Bank said all sub-indices expanded and this was mainly due to the seasonal demand and the industry expectations for the next three months remain positive.

Meanwhile, the Sri Lanka Purchasing Managers’ Index for Services (PMI – Services) also expanded in March 2024, CBSL said.

PMI – Services Business Activity Index recorded an index value of 67.7 in March, this was 53 in February 2024.

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 & beverages and textiles & apparel sectors. 

Most of the manufacturers, especially in the food & beverage sector, were optimistic about the upcoming festive season. 

Moreover, 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 the seasonal peak.

Sri Lanka Purchasing Managers’ Index for Services (PMI – Services) indicated a further expansion in service 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. 

Meanwhile, 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.

Employment increased due to new recruitments made by several companies in view of the festive season. Meanwhile, 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.

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