- New orders continue to grow
- Suppliers’ delivery time increases month-on-month
The manufacturing purchasing managers’ index (PMI) remained expanded, recording an index value of 52.5 in February 2022. The improvement was mainly attributable to the continued expansion in new orders. However, production, stock of purchases, and employment declined while suppliers’ delivery time lengthened on a month-on-month basis, according to the Central Bank of Sri Lanka (CBSL).
An expansion in new orders, particularly in the manufacture of food and beverage, was witnessed in February, ahead of the Sinhala and Hindu New Year season. However, production declined on a month-on-month basis, especially in the manufacture of food and beverage, and textiles and wearing apparel sectors, following the seasonal pattern as there was a lesser number of working days in February, and due to supply-side constraints. Moreover, the stock of purchases declined due to supply-side impediments.
Many respondents highlighted that it was difficult to acquire imported raw materials and packing materials due to delays in opening letters of credit (LCs). For the next three months, the expectations for manufacturing activities remain at elevated levels, anticipating continuous improvements in economic conditions locally and globally.
The services sector PMI recorded an index value of 51.8 in February, indicating a marginal growth across the services sector. This marginal increase was underpinned by the increases observed in new businesses, business activities, and expectations for activity sub-indices. New Businesses rose at a slower pace in February compared to January, particularly with the improvements observed in financial services, professional services, real estate, telecommunication, and transportation subsectors.
Business activities continued to grow in February, even though at a slower pace, with the improvements observed in several subsectors. Accordingly, financial services, education, professional services, other personal activities, real estate, and transportation subsectors reported improvements during the month.
In addition, business activities in the accommodation, food, and beverage subsector also recorded a marginal growth amid the steady increase in tourist arrivals despite the disturbances that occurred from disruptions to fuel and electricity supplies during the latter part of the month.
Nevertheless, business activities related to the wholesale and retail trade subsector observed a deterioration during the month. Employment fell slightly in February for the first time after three
months of an increase due to retirements and the increasing number of resignations. Meanwhile, backlogs of work continued to decline at a higher pace during the month.
