Manufacturing, services activities see slowdown in September

„Improvement in employment due to new recruitment to State sector „Survey respondents say optimism affected by political uncertainty

Sri Lanka’s manufacturing and services sector activities expanded in the month of September, albeit at a slower pace compared to August, according to the Central Bank’s SL Purchasing Managers’ Index (PMI). Manufacturing activities recorded a PMI index value of 54.7 percent, down from 1.9 index points in August.

The deceleration in activities was mainly driven by the slowdown in production in manufacturing of food & beverages and textiles & wearing apparel sectors.

New orders also slowed down in September compared to August, but stock purchases increased significantly with the expectation of high demand in future specially in the manufacturing of food & beverages sector.

An improvement in employment was observed in September due to the recruitment of new employees to fill public sector vacancies.

The global manufacturing PMI recorded a value of 49.7 in September with an increase of 0.2 index points from August 2019.

The services sector PMI slowed by 0.2 index points to 52.7 in September mainly due to slower expansion in business activities.

Despite the slower expansion in business activities, new businesses exhibited an accelerated pace of growth in September, which could positively contribute towards the growth of future business activities.

Accommodation, food & beverage services; financial services; and transportation sub sectors contributed towards the growth in new businesses.

Meanwhile, expectations for activity remained at the same level in September compared to August.

However, some respondents to the survey had highlighted that their optimistic expectations on business activities were affected by the uncertainty in business environment due to current political climate of the country.

Global services PMI eased to 51.6 in September, its joint-weakest reading in over three years.