Sri Lanka Manufacturing Activity Eases

Sri Lanka’s Manufacturing PMI fell to 53 in August 2026 from 55 in July, indicating continued expansion in the manufacturing sector, albeit at a slower pace. All sub-indices remained above the neutral threshold, although production weighed on the index, falling into negative territory amid lower activity in the manufacture of textiles and wearing apparel. Lead times lengthened, reflecting persistent supply disruptions, while new orders were largely unchanged at the neutral 50 mark. Meanwhile, stocks of purchases increased amid a gradual build-up of inventories in preparation for year-end seasonal production. Employment also rose, reflecting continued hiring. Looking ahead, manufacturers remained optimistic, although sentiment moderated amid expectations of a year-end seasonal upturn.

Sri Lanka’s Manufacturing PMI rose to 55 in July 2026, up from 53 in June, indicating a faster expansion in manufacturing activity. New orders (55.9 vs 50) and production (54.5 vs 52) increased, driven by robust performance in the food and beverage manufacturing sector. Reflecting positive expectations for activity, employment rose to 51 from 50.5, while stocks of purchases remained in expansionary territory at 51.5, despite easing from 56.6. Meanwhile, suppliers’ delivery times remained extended at 61.5, little changed from 61.6, pointing to persistent supply-chain pressures as geopolitical tensions persist. Overall, manufacturers remained optimistic about activity over the next three months, while maintaining caution amid global uncertainties.

Sri Lanka's Manufacturing PMI fell to 53.0 in June 2026 from 56.6 in the previous month, signaling a slower pace of manufacturing expansion. New orders eased to the neutral mark (50.0) from 52.6, indicating broadly unchanged demand from the previous month. Production continued to expand but at a slower pace (54.6 vs. 57.2), supported mainly by food and beverage manufacturing. Hiring remained robust and broadly in line with the previous month (59.7 vs. 60.5), although manufacturers continued to face challenges from skilled labor shortages and rising labor costs. Supplier delivery times lengthened further (66.3 vs. 61.6), while inventories increased (56.6 vs 52.6) as firms sought to mitigate supply disruptions linked to the conflict in the Middle East. Despite these headwinds, manufacturers' expectations remained positive, although geopolitical uncertainty continued to weigh on the outlook.