The Central Bank of Sri Lanka reports that the country’s Purchasing Managers’ Index (PMI) for December 2024 indicates expansions in both manufacturing and services sectors.

Manufacturing Sector

The Manufacturing PMI reached 57.2 in December 2024, signifying continued growth in manufacturing activities. This improvement was driven by increases in New Orders and Production sub-indices, particularly in the food and beverages sector due to festive season demand. Conversely, the textiles and apparel sector experienced declines in New Orders and Production, attributed to reduced orders from major export destinations during winter holidays. This downturn led to a decrease in casual labour within the sector, impacting the overall Employment sub-index. Additionally, the Stock of Purchases sub-index expanded, while Suppliers’ Delivery Time remained extended. Manufacturers anticipate improved activities in the coming three months, expecting better economic conditions.

Services Sector

The Services PMI recorded a significant expansion, with the Business Activity Index at 71.1 in December 2024. This growth was propelled by robust performances across various sectors. Wholesale and retail trade saw substantial increases due to the festive season and peak tourist arrivals. Financial services also experienced notable improvements amid heightened lending activities. Other personal services, including leisure activities, benefited from the holiday season. New Businesses rose, primarily in financial services, wholesale and retail trade, and personal services. Employment levels increased to support the surge in economic activities driven by tourism and festive demand. Backlogs of Work also grew in December 2024. Expectations for Business Activities over the next three months remain positive, supported by favourable macroeconomic conditions.

These findings underscore the resilience and adaptability of Sri Lanka’s economy amid seasonal fluctuations and global economic challenges.