Sri Lanka’s manufacturing and services sectors continued to expand in February, driven by the upcoming festive season, according to the latest Purchasing Managers’ Index (PMI) compiled by the central bank.
The PMI for manufacturing stood at 56.8 in February, down from 59.0 in January but still indicating growth. The expansion was largely fueled by increased demand in the food and beverage sector, with new orders rising to 60.5 and production at 53.0. Employment (57.0) and stock of purchases (55.0) also saw growth as businesses prepared for heightened seasonal demand. Suppliers’ delivery time lengthened to 56.6, reflecting supply chain pressures.
“Expectations for manufacturing activities in the next three months remain positive, mainly due to the upcoming festive season,” the central bank reported.
Meanwhile, the services sector also expanded, with the PMI for services reaching 56.5 in February 2025, though at a slightly slower pace. Business activity improved across multiple sectors, including financial services, wholesale and retail trade, education, real estate, accommodation, and insurance.
New business growth stood at 58.5, with financial services, food and beverage, education, and transportation-related activities leading the increase. Employment levels also rose to 59.6 as companies expanded their workforce in anticipation of higher demand. However, backlogs of work declined further to 45.6.
“Expectations for business activities over the next three months continue to improve significantly [81.3], driven by festive season demand,” the report noted.
With both manufacturing and services showing strong momentum, Sri Lanka’s economy is poised for continued expansion as consumer spending rises in the lead-up to the festive season.