Sri Lanka Services Activity Rebounds in May

Sri Lanka’s Services PMI rose to 61.4 in July 2026, up from 58.4 in June, marking the highest reading since January and a fourth consecutive month of expansion, signaling a faster expansion in services activity. New business continued to grow, although at a slower pace (60.2 vs 62.5), led mainly by the transportation and professional services sub-sectors, with financial and other personal services also contributing to the expansion. Employment increased at a slower pace (52.9 vs 54), supported by new recruitment and fewer staff resignations. Meanwhile, backlogs of work moved further into expansionary territory, rising to 51.2 from a neutral reading in June. Business expectations for the coming quarter strengthened further, supported by anticipated economic improvements and strong tourist arrivals for the Kandy Esala Perahera. However, broader global economic uncertainties continued to pose downside risks to the outlook.

Sri Lanka’s Services PMI rose to 58.5 in June 2026 from 56.9 in the previous month, signaling a faster expansion in business activity, supported by broad-based improvements across sectors. New business strengthened (62.5 vs. 58.0), led by the financial services sector, while insurance, professional services, and other personal services also contributed to growth. Employment returned to expansion (54.0 vs. 49.4) as multiple firms expanded their workforce. Meanwhile, backlogs of work stabilized at the neutral threshold (50.0) after contracting in May (48.1). Looking ahead, firms remained optimistic that business activity would continue to expand over the next quarter, supported by improving economic conditions and an expected increase in tourist arrivals, although global uncertainties continue to pose risks to the outlook.

Sri Lanka’s Services PMI rose to 56.9 in May 2026 from 46.7 in April, signaling a rebound in services activity. The expansion was driven mainly by the financial, professional, and personal services sub-sectors, while real estate, IT programming, and goods transportation also posted notable growth. New business increased to 58.0 from 48.9, supported primarily by financial and professional services, with additional contributions from wholesale and retail trade, personal services, and goods transportation. Expectations for business activity over the next three months remained positive, although easing slightly to 64.7 from 65.9, supported by anticipated tourist arrivals during the Perahera season and improving economic conditions. Meanwhile, employment (49.4 vs 44.4) and backlogs of work (48.1 vs 48.8) remained below the 50 threshold.