Aug 17, Colombo: Both manufacturing and services sectors grew slowly in July 2018, compared to the previous month, while both sectors continued to expand albeit slowly, the Central Bank's Purchasing Managers' Index (PMI) Survey released for the month said.
According to the survey, the Manufacturing Sector PMI decreased to 57.2 index points in July 2018 from 57.6 index points observed in the previous month.
The marginal slowdown observed in manufacturing activities in July was mainly driven by slowdown in employment due to the difficulties in replacing unskilled employees to account for high labor turnover especially in the Food and Beverages, and Textiles and Apparel sectors.
Moreover, new orders in July 2018 slightly slowed down. However, production and stock of purchases show some improvement, especially in manufacturing of chemicals and pharmaceutical products with the expected positive outlook for the next three months.
Overall, all the sub-indices of PMI recorded values above the neutral 50.0 threshold signaling an overall expansion in July albeit at a slower rate during the month. Meanwhile, the Expectation for activities indicates an improvement for the next three months.
The Services Sector PMI declined to 57.8 index points in July 2018 from 58.7 index points recorded in June 2018 indicating that the Services sector continued to expand, albeit at a slower pace, in July 2018 supported by faster growth in New Businesses, Business Activity and Expectations for Activity.
The growth in New Businesses and Business Activities was mainly observed in financial services and insurance sectors.
Employment levels expanded at a slower rate compared to the strong pace of job creation in the previous two months.
Prices Charged of the Services sector increased at a slower rate and recorded three-month low in July 2018, owing to absence of any unforeseen price hikes during the month. Expected Labor Cost in the services sector also increased at a slower rate during July.