SL manufacturing and services rebounded strongly in November
By: Staff Writer
Colombo (LNW): Sri Lanka’s manufacturing and services have rebounded strongly recording an uptick in in November 2023 as the island nation is vow recovering from an economic crisis with the unlocking of the second tranche of US$ 3 billion IMF bail out loan, a Purchasing Managers Index compiled by the central bank showed.
The manufacturing and services sectors saw an uptick in November as per the Purchasing Managers Index (PMI) compiled by the Central Bank.
The Manufacturing PMI increased to 57 on a month-on-month basis in November 2023, driven by the seasonal factors.
The index exceeded the neutral threshold after March 2023, with a positive contribution from all the sub-indices, CBSL said.
The increases in new orders were largely driven by the manufacture of food & beverages and textiles & apparel sectors.
Moreover, the increase in production was largely due to the manufacture of food & beverages sector, owing to the seasonal demand.
Further, employment and stock of purchases also increased on a month-on-month basis in line with the improvements in new orders and production.
Moreover, Suppliers’ Delivery Time lengthened during November compared to the previous month, indicating the tightened supply conditions.
The overall expectation for the manufacturing activities remained positive for the next three months, mainly attributable to the gradual recovery in economic activities.
However, the firms are concerned about the tax revisions, which will be effective from January 2024.
CBSL said the Services sector PMI recorded an index value of 59.4 in November 2023 indicating an accelerated expansion in the services activities.
This was led by the increases observed in new businesses, business activities, employment and expectations for activity.
New businesses increased in November 2023 compared to October 2023, particularly with the increases observed in financial services, professional services and accommodation, food and beverages sub-sectors.
CBSL said the business activities continued to expand in November 2023 in line with the positive developments observed in most of the sub-sectors.
Accordingly, significant improvements were observed in business activities related to other personal activities and accommodation, food and beverage sub-sectors driven by the sharp increase in tourist arrivals.
Financial services improved further in line with the increase in credit demand following the recent reductions in policy rates.
The wholesale and retail trade sub-sector also continued to grow amid the festive season supported by the seasonal discounts offered.
Employment increased as new recruitments were made to meet the seasonal demand, whereas backlogs of work continued to decline during November.
CBSL said expectations for business activities for the next three months continued to increase in November due to festive and tourist seasons.
However, some respondents expressed their concerns regarding the amendments to Value Added Tax w.e.f. 1 January 2024.