Feb 16, Colombo: Both manufacturing and service sectors of Sri Lanka recorded moderate expansion in January 2017, the Central Bank's recent Purchasing Managers' Index (PMI) Survey showed.
According to the survey, the Manufacturing PMI decreased by 2.1 index points to 56.2 in January 2017 compared to December 2016 while the Services Sector PMI eased to 57.5 in January 2017 from 59.8 in December 2016.
The deceleration in Manufacturing PMI indicate that the manufacturing activities expanded at a moderate pace in January 2017 largely attributable to post seasonal realignment of business plans ahead as reflected in Production and New Orders sub-indices.
The Stock of Purchases sub-index increased in January indicating an accumulation of stocks mainly as a precaution to face possible delays of supply of materials which is also associated with the lengthening of Suppliers' Delivery Time. The Employment sub-index also increased compared to the previous month. Overall data points to an expansion where all the sub-indices are above the neutral 50.0 threshold. The expectations for activities indicated an improvement for the next three months.
The decline in Services PMI over the last month's value indicates that economic activities in the Services sector expanded at a slower rate in January 2017, compared to the previous month.
The deceleration in Services PMI was caused by the decelerations in New Businesses and Business Activity sub-indices and the decline in Backlogs of Work sub-index.
Employment sub-index remained unchanged while Expectations for Activity sub-index increased in January 2017 compared to December 2016. Prices Charged and Future Labor Cost, which are not taken into consideration in PMI compilation process, increased in January 2017 compared to the previous month. Future Labor Cost is measured by Expectations for Labor Cost, a newly introduced variable from January 2017.
The Central Bank releases the results of the PMI survey conducted to provide purchasing professionals, business decision-makers and economic analysts with a timely set of data to help better understand industry conditions.