Industrial activities pick up momentum despite slowing in April due to holidays

The industrial heft of the country, measured by the Index of Industrial Production, slipped in April from March, due to factory closures during the traditional new year holidays but the index was up from the same period a year ago, signalling that the activities are regaining strength.

The latest data available for April showed that the industrial sector gauge has recorded index points of 89.6, up 1.7 percent from the same month in 2024.

The index was down from 103.9 recorded for March, which typically has a higher value ahead of the New Year holidays. The Purchasing Managers’ Index (PMI) for manufacturing activities, which is a much broader index than industrial production, also showed a similar pattern in April, due to the same reasons, as extended holidays led to a temporary stoppage in factory activities.

For instance, the PMI for manufacturing for April recorded an index value of 40.1, sharply down from 63.9 index points in March.

Under the PMI, an activity is split between an expansion and a contraction at 50.0. The April industrial activity has been driven mainly by the beverages, of which the index value rose by 15.9 percent to 126.3 and the other non-metallic mineral products, of which the index rose by 21.1 percent to 98.5.

The other key sub-sectors under the broader industrial activities, wearing apparel, coke and refined petroleum products and rubber and plastic products, saw marginal expansions in their index values.

Meanwhile, food manufacturing slid 2.5 percent index points, while the chemical and chemical products too followed suit, with a decline in the index value by 3.2 percent.

Sri Lanka’s industrial activities have seen a renaissance, with the improvement in foreign currency liquidity, decline in the interest rates, removal of import restrictions and pick-up in demand conditions as prices have been softer.

Exports have been resilient, despite some uncertainty over the recent tariffs by the United States.