PMI increases at healthy rate; both manufacturing and services up

Sri Lanka Purchasing Managers’ Index (PMI) increased at a healthy rate in August, with data pointing towards potential to handle increased levels of activity over the coming months, according to the Central Bank.

Accordingly, the manufacturing sector PMI increased to 53.5 in August from 50.6 in July while the services sector PMI increased to 61.2 from 57.8 during the same time period.

The manufacturing sector PMI increased due to improvements in new orders, employment and production.

“All the sub-indices of manufacturing sector PMI, apart from stock of purchases which was unchanged, increased compared to the previous month. Notably, new orders, employment and suppliers’ delivery time indices recovered from the contraction observed in July,” the Central Bank said.

The Bank noted that with all manufacturing sector sub-indices at expansionary levels above the neutral 50.0 threshold, manufacturing activities could improve over the next 3 months.

The services sector PMI recorded increases in the new business, business activity, employment, and expectations for activity sub-indices, while the backlogs of work index declined.

“Decline in backlogs of work amidst rising new businesses and business activity indicates increasing efficiency levels within the services sector and freeing up of capacity for elevated expectation for Activity,” the Central Bank said.