February 22, 2019

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    Sri Lanka's services accelerate in December

    January 18, 2019

    According to the Sri Lanka Purchasing Managers' Index (PMI) released by the Statistics Department of Central Bank, the industrial production in Sri Lanka have eased in December 2018 compared to the same month in 2017 while services accelerated.The Manufacturing Sector PMI decreased 0.6 index points to 53.7 in December 2018 from 54.3 index points recorded in November 2018.

    The slowdown observed in manufacturing activities in December was mainly driven by the slowdown in employment and production, especially in manufacturing of textiles, wearing apparels, leather and related activitiesHowever, new orders increased mainly driven by the manufacturing of food and beverages activities with the continued festival season demand.

    A significant decline in employment was experienced as some employees moved to seasonal jobs for better salaries partly impacting on decrease in production.All the sub-indices of PMI Manufacturing recorded values above the neutral 50.0 threshold signaling an overall expansion in December yet at a slower pace compared to November 2018.

    Services sector growth accelerated in December 2018, underpinned by a strong upturn in Business Activities, Expectations for Activities and New Businesses.The PMI of Services Sector increased by 2.1 index points to 54.7 compared to 52.6 in November 2018.

    Business Activities sub index reached a ten-month high in December as wholesale & retail trade and accommodation, food & beverage sub sectors posted a strong growth due to the festive season and peak season for tourism.Transportation of goods recorded a growth with increased transhipment volumes while other personal services such as leisure activities also improved with the holiday season. The growth in new businesses were observed across financial services, insurance and professional services due to favorable demand conditions.

    However, despite the strong rise in Business Activities, the rate of job creation slowed among many sectors in December due to delays in filling open positions.Prices Charged of the Services sector increased due to depreciation of the local currency and recent interest rate hikes while the expected Labour Cost in the services sector increased at a slower pace during December.

     

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