SL breaks two months of contraction in manufacturing in June

S r i L a n k a ’ s manufacturing activities have picked up in June after lagging two months in a row while services have continued to expand – albeit at a slower rate, country’s newly compiled Purchasing Managers’ Index (PMI) showed. Acc o r d i n g l y, t h e manufacturing PMI recorded 55.1 index points, picking up from 47.9 in May, recording a rise of 7.2 index points but the employment in the manufacturing sector declined. An index value below 50 indicates a contraction in the economic activities while an index value above 50 points an expansion in activities.

PMI is a closely watched economic indicator in both developed and emerging economies on a monthly basis to gauge the direction of the economy. The PMI in Sri Lanka was introduced in May 2015 few months into the Governor Arjuna Mahendran took office at the Central Bank. “This improvement was bolstered by the significant increase observed in production and new orders indices. Moreover, all the sub-indices of PMI, apart from suppliers’ delivery time increased compared to the previous month,” Central Bank’s Statistics Department said in a statement

Despite the index demonstrating an expansion in activities, Sri Lanka’s business confidence index (BCI) – the barometer of business sentiment—measured monthly by LMD magazine with Nielsen plunged to 126 in June, well below its 12-month and all time averages of 155 and 130, respectively. The last time the index went below 126 was in February 2014 when the index touched 124 ahead of the UNHRC resolution on Sri Lanka and Provincial Council Elections in 2014. However, the Central Bank’s expectations indicate an improvement in manufacturing activities for the next three months. June’s manufacturing PMI on a year-on-year basis however indicates a marginal drop of 2.4 index points from June 2015. Meanwhile, the services sector PMI continued to expand, albeit at a slower rate as June’s services PMI recorded 56.3 index points compared to 58.1 index points in May. On a year-on-year basis, June’s services PMI declined by 8.7 index points.

“This slowdown in expansion of activities was observed across new businesses, employment, backlogs of work and expectations for activity sub-indices,” the Central Bank said. Meanwhile the prices charged decelerated in June compared to month-on-month increase recorded in May 2016. DFCC Chief Executive Arjun Fernando hands over sponsorship to State Minister International Trade Sujeeva Senasinghe and EDB Chairperson Indira Malwatte Link Natural Products handing over their contribution to the event Senior officials of Brandix Lanka pledging support to the WEDF 2016 THE MECHANISM WAS INTRODUCED EARLIER TO ADDRESS THE COMMUTERS’ FREQUENT COMPLAINT OF NOT RECEIVING BALANCE MONEY PROPERLY FROM PRIVATE BUSES MONEY PROPERLY FROM PRIVATE BUSES IN SELECTED PASSENGER ROUTES WHICH HAD THE HIGHEST NUMBER OF BUSES AND PASSENGERS