Sri Lanka’s Purchasing Managers’ Index for Manufacturing (PMI – Manufacturing) has registered a significant decline, falling to 40.1 in April 2025.
This marks a notable downturn compared to the seasonal peak experienced in March.
Key indicators within the manufacturing sector all showed contraction during April.
The sub-indices for Production, New Orders, Stock of Purchases, and Employment all decreased, contributing to the overall negative performance of the index.
Survey respondents indicated that the drop in New Orders was primarily due to the waning demand following the Sinhala and Tamil New Year festive season, particularly impacting the food and beverage industry.
The decline in Production was largely attributed to the reduced number of working days in April, as many manufacturing facilities temporarily suspended operations for the New Year holidays.
Manufacturers also scaled back their temporary workforces after the seasonal production requirements subsided, leading to a decrease in the Employment sub-index.
Consequently, the Stock of Purchases also declined in April, aligning with the reductions in New Orders and Production.
Adding to the challenges, Suppliers’ Delivery Time lengthened further in April. This was mainly due to disruptions in supply chains experienced during the extended festive period.
Meanwhile, the Sri Lanka Purchasing Managers’ Index for Services (PMI – Services) indicated a slower pace of expansion in April 2025, recording a value of 60.6.
While business activities within the services sector did expand overall, supported by improvements across various sectors, the rate of growth was less pronounced than in previous months.
Wholesale and retail trade activities showed a significant expansion, driven by the festive demand. The financial services sector also continued its upward trend, supported by increased lending activities.
However, the extended holidays in April had a general dampening effect on overall business activity.
Freight forwarding companies, in particular, faced challenges due to uncertainties surrounding the import tariffs imposed by the United States.
Despite the slower overall expansion, New Businesses increased in April, primarily fueled by growth in financial services and wholesale and retail trade-related activities.
Employment within the services sector continued to rise due to new hires in several companies.
Conversely, Backlogs of Work continued their downward trend in April 2025.The contrasting performances in the manufacturing and services sectors highlight the complex economic landscape in Sri Lanka following the festive season and amidst global trade uncertainties.
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