Sri Lanka Services Activity Rebounds in May

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.

Sri Lanka’s Services PMI fell to 46.7 in April 2026 from 59.4 in the previous month, marking the lowest level since July 2022 and signaling a contraction in services activity. The decline was mainly linked to seasonal effects following the festive period and higher energy prices. New business fell for the first time since April 2023, dropping to 48.9 from 57.6, with weaker activity reported in transportation of goods, insurance, wholesale and retail trade, and accommodation and food services. Employment also contracted, falling to 44.4 from 54.2 due to contract expirations, retirements, and resignations. Meanwhile, backlogs of work continued to decline, though at a slower pace, with the index edging up to 48.8 from 48.1. Despite the weaker current conditions, expectations for business activity over the next quarter improved to 65.9, supported by anticipated stabilization following an end to the Middle East war.

Sri Lanka’s Services PMI rose to 59.4 in March 2026 from 54.4 in February, signaling continued expansion in activity. Growth was broad-based, led by financial services amid increased lending, while wholesale and retail trade benefited from festive demand. Professional and other personal services also posted notable gains. New business expanded further (57.6 vs 53.8 in February), driven mainly by financial services, alongside strong growth in insurance and pension funding. Employment edged lower (54.2 vs 55.1), although firms increased hiring to accommodate stronger consumer demand ahead of the festive season, while the pace of decline in backlogs of work moderated (48.1 vs 47.6). Looking ahead, expectations for business activity over the next quarter continued to rise, albeit at a softer pace (57.1 vs 65.9), supported by seasonal demand and potential new opportunities, although some firms flagged downside risks from the Middle East conflict and broader global economic uncertainty.