Manufacturing, Service Sectors See Slow Growth In October
The country’s manufacturing and services sectors have shown slow growth in October as per the Sri Lanka Purchasing Managers’ Index (PMI) Survey.
The Central Bank said Manufacturing Sector PMI recorded 54.8 in October, which is a decrease of 4.2 index points compared to September 2017. This indicates that manufacturing activities expanded at a slower pace in October compared to September 2017. This was mainly driven by the New Orders and Employment sub-indices which moderated from the levels of increase observed in the previous month. The Production and Stock of Purchases sub-indices also expanded at slower rates in October. Meanwhile, the Suppliers’ Delivery Time sub-index lengthened at a higher rate which was led by the lengthening of delivery time of overseas suppliers due to the high demand for their supplies from other countries.
Overall, all the sub-indices of PMI recorded values above the neutral 50.0 threshold, signalling an overall expansion in October 2017, but at a slower pace than the previous month. Moreover, the expectation for activities remains positive for the next three months.
Services sector PMI recorded 55.3 index points in October from 57.0 index points in September 2017. This indicates that the services sector continued to expand in October 2017 at a slower rate compared to September 2017.
Business activity accelerated while New Businesses and Expectations for Activity decelerated in October compared to September 2017. For the same period, Employment and Backlogs of Work declined. The increase in Business Activity was mainly observed in the financial services and telecommunication sectors, the reasons being the expansion of delivery channels and technology-based improvements. Employment declined for the second time since the survey began in May 2015 due to non-recruitment for vacancies of retired employees and reduction in the number of casual staff mainly in the accommodation, food and beverage sector.
Prices Charged increased at a slower rate in October compared to September 2017 while a decline in Prices Charged was observed in the accommodation, food and beverage sector. Expected Labour Cost increased in October 2017 due to seasonal benefits such as bonuses and festival advances. (ft)