Sri Lanka’s manufacturing falls in June; services up

Sri Lanka’s manufacturing activities, measured by the Manufacturing Purchasing Managers’ Index (PMI) fell to neutral levels in July after a pickup in June, the data released by the Central Bank showed.

Manufacturing activities were down below 50 index points both in April and May.

An index value below 50 indicates a contraction in the economic activities.

The Central Bank said manufacturing PMI decreased to 50.6 in July indicating a neutral performance in comparison to 55.1 in June 2016.

“The decline in July in comparison to June was mainly due to the decrease in new orders and production indices. The month-on-month decline of the PMI and the sub-indices follows the significant increase observed in the month of June compared to May 2016,” the Central Bank said.

All sub-indices of PMI, apart from employment and stock of purchases indices, declined compared to the previous month.

“Overall data points to an expansion on the strength of production and stock of purchases indices while all the other sub-indices remained below the neutral 50.0 threshold. The expectations for activities indicated an improvement for the next three months,” the Central Bank said.

Meanwhile, the services sector PMI increased to 57.8 in July from 56.3 recorded in June 2016.

The moderate increase in PMI over the last month’s value indicates that economic activities continued to expand at a moderate pace in recent months.

Business activity recorded the highest rate of expansion in four months.

The employment sub index recovered from a low of 51.5 index points in June.