Sri Lanka’s PMI Manufacturing index signals strong recovery despite external challenges and rising costs
Sri Lanka’s manufacturing sector showed promising signs of growth in May, with the Purchasing Managers’ Index (PMI – Manufacturing) reaching 55.5, well above the neutral 50-point mark that separates expansion from contraction. This indicates a clear expansion in manufacturing activities following a seasonal slowdown in April.
All key sub-indices rebounded above the neutral threshold, reflecting broad-based recovery. Notably, increases in new orders and production were driven primarily by the textiles and wearing apparel sectors, which remain pivotal to the industry’s momentum. Employment levels also improved, underscoring renewed confidence among manufacturers in these sectors.
The stock of purchases held steady compared to the previous month, while supplier delivery times continued to lengthen, pointing to ongoing supply chain pressures. Despite these challenges, industry sentiment remains optimistic, with expectations of gradual demand growth over the next three months.
However, manufacturers expressed caution about potential headwinds, particularly the recent upward revision in electricity tariffs and geopolitical tensions in the Middle East, which could impact costs and supply stability.
Overall, the PMI data underscores a robust manufacturing growth trajectory for Sri Lanka, signaling resilience and recovery amid a complex operating environment.