Sri Lanka Manufacturing PMI Falls to One-Year Low

Sri Lanka’s Manufacturing PMI dropped sharply to 42.6 in April 2026 from 66.7 in March, marking the lowest reading in one year and signaling a contraction in manufacturing activity. The decline was mainly driven by a sharp slowdown in new orders, which fell to 36.4 from 69.9, amid fading festive demand in the food, beverage, textile, and apparel sectors. Production also contracted significantly, dropping to 30.5 from 68.8, largely due to fewer working days during the Sinhala and Tamil New Year period, when many factories temporarily closed. Employment weakened to 47 from 55.9 as firms reduced temporary staff following seasonal demand. The stock of purchases index also declined to 44 from 59.9, in line with lower production and orders. Meanwhile, suppliers’ delivery times lengthened further, with the index at 68.7, reflecting festive disruptions and logistical challenges linked to the Middle East conflict.

Sri Lanka’s Manufacturing PMI climbed to 66.7 in March 2026 from 56.8 in the previous month, hitting its highest level since June 2020. This signals strong expansion driven by seasonal demand, although firms continued to face tight production conditions due to shortages of raw materials and fuel, rising costs, and logistical constraints. New orders (69.9 vs 55 in February) and production (68.8 vs 54.5) expanded, particularly in food & beverages and textiles & wearing apparel. The stock of purchases also grew, albeit at a softer pace (59.9 vs 60), with some firms building precautionary inventories amid risks linked to the Middle East conflict. Employment growth slowed (55.9 vs 58.6), while suppliers’ delivery times lengthened further (75.5 vs 59.6) due to strong demand and shipping disruptions. Looking ahead, manufacturers remained optimistic for the next quarter, although expectations were tempered by uncertainties surrounding the Middle East conflict.

Sri Lanka's Manufacturing PMI rose to 56.8 in February 2026 from 56.1 in January, indicating continued expansion in manufacturing activities. The Employment sub-index (58.6 vs 51.5) and Stock of Purchases sub-index (60.0 vs 56.0) expanded further during the month, reflecting firms' preparations ahead of the festive season. Some firms also reported pre-emptive stocking in anticipation of potential supply pressures stemming from Middle East unrest. The New Orders sub-index (55.0 vs 58.5) and Production sub-index (54.5 vs 57.5) expanded in February, though at a slower pace than the prior month. Meanwhile, Suppliers' Delivery Times lengthened further, signaling increased pressure on supply chains. Expectations for manufacturing activities over the next three months remain positive, driven by anticipated festive demand. However, many respondents expressed caution about potential adverse effects if the Middle East conflict persists.