According to the Sri Lanka Purchasing Managers’ Index (PMI) released by the Statistics Department of Central Bank, Manufacturing and Services sectors rebounded in May 2020 after plunging in April 2020 to the lowest levels since the beginning of the survey in 2015.

Manufacturing sector PMI recorded a noticeable bounce in May 2020 reaching to 49.3, which is an increase of 25.1 index points, from the all-time low of 24.2 recorded in April 2020.

The gradual easing of restrictions for mobility has contributed to the resumption of economic activities in the manufacturing sector.

Production sub-index reported an index value of 51.1 in May 2020 compared to 3.5 reported in April, reflecting a significant expansion in volume produced, particularly in manufacturing of food, beverages and manufacturing of textiles, wearing apparels sectors.

Further, New Orders, Stock of Purchases, Employment sub-indices also improved during the month of May 2020, yet remained below the neutral level.

Many respondents in the manufacturing of textile and wearing apparel and manufacturing of chemicals and chemical products sector highlighted that they still have not received orders for their products and therefore, they have initiated to produce some alternative products relating to health and safety instead of their regular products.

The overall expectations for manufacturing activities for the next three months significantly increased compared to the previous month, yet the manufacturers are still concerned that COVID-19 pandemic would continue to affect the consumer demand.

Services sector PMI rebounded significantly to 43.1 in May 2020 from a record-low of 29.8 in April 2020, with the steps taken towards resumption of civilian life and institutions back to normalcy in the country following the curb in the spread of COVID-19 pandemic.

New Businesses sub index increased in May 2020 owing to improvements in new businesses in transportation and wholesale and retail trade sub-sectors with the lift of domestic travel restrictions, which had been imposed to control the spread of COVID-19 pandemic.

Respondents in Services sector are optimistic on future business activities with the expected revival of economic activities aftermath of COVID-19 pandemic. However, Employment declined in May 2020 compared to previous month due to halt of new recruitments amidst retirements.

http://www.colombopage.com/archive_20A/Jun17_1592368940CH.php