Financial News from Sri Lanka: According to the Sri Lankan Purchasing Managers Index (PMI) published by the Central Bank’s Statistics Department on Thursday, both manufacturing and service industries continued to expand last month after the terrorist attacks of April 21.
Manufacturing operations continued to expand at a greater pace in July 2019, recording an index value of 55.7, which is an increase of 1.8 index points, compared with 1.8 index points.
The development in PMI production is primarily attributable to the important rise in New Orders and subsequent increase in production, particularly in the food & beverage industry. The rise in new orders was primarily owing to the economy’s gradual recovery from Easter Sunday attack disruptions.
Meanwhile, employment rose at a slower pace during the month of July, although many participants in the textile and clothing sector pointed out that they experienced a greater rate of employee turnover during the month. Stocks of purchases improved considerably with the development of new orders and production as well as a precautionary measure to deal with potential disruptions during the upcoming election.
Furthermore, Suppliers ‘ Delivery Time was extended to a neutral level indicating the same delivery time as the past month, primarily owing to the standardization of tight safety policies implemented after the Easter Sunday attacks. All PMI Manufacturing sub-indices surpassed the limit of 50.0 (neutral) showing a general development in manufacturing except for Suppliers ‘ Delivery Time, which was at a neutral level.
In July 2019, the service sector continued to grow, backed by accelerated expansion in New Business, Business Activity, and Activity Expectations compared to June 2019. This shows a further recovery of the services industry after the attack on Easter Sunday.
Wholesale and retail business operations; housing, food and beverage; financial services; and transportation sub-sectors expanded in July 2019 for the second month in a row. The optimism of service suppliers over the next three months reinforced the company perspective to a 29-month high level, as expected.
Employment has deteriorated relative to the past month, however, as there is a delay in filling vacant positions and replacing labor-intensive job with technology. Prices charged in the service sector declined in July 2019 owing to lower loan rates in conjunction with the lowering of deposit rates in the financial services sub-sector.