Manufacturing and services activities continue to plough ahead with vigour in August

Sri Lanka’s manufacturing and services sectors continued to expand in August, a Purchasing Managers’ Index (PMI) survey showed on Monday, underscoring resilience in business activity alongside solid second-quarter growth.

The manufacturing PMI stood at 55.2 in August, down from 66.2 in July but still above the 50-point threshold that separates expansion from contraction. The services PMI eased to 68.9 from 70.1 in July.

The data came hours after the Department of Census and Statistics reported that the economy grew 4.9 percent in the second quarter of 2025, slightly higher than the 4.8 percent expansion in the first quarter. Sri Lanka’s GDP has now posted eight straight quarters of growth.

Manufacturing activity was buoyed by stronger new orders and production, mainly in the food and beverage segment, the survey showed. Employment in the sector also expanded as firms hired to meet demand in both domestic and export markets.

“Suppliers’ delivery time continued to lengthen during the month, with some respondents reporting delays in international shipping,” the PMI report said. Manufacturers expect demand to rise further in the next three months, supported by the year-end festive season.

Services activity remained robust, driven by wholesale and retail trade, accommodation, food and beverage, and personal services, supported by higher tourist arrivals. Rising consumer spending amid easing prices and higher incomes also underpinned demand.

Financial services activity increased on stronger lending, helped by lower interest rates. Private sector credit expanded by more than Rs. 200 billion for two straight months, pushing total growth in the first seven months close to Rs.1 trillion, the highest for any year.

Employment in the services sector also increased, reflecting higher operational needs.