The COVID-19 induced downturn in the Sri Lankan manufacturing sector deepened during April as reflected by further contraction in Manufacturing PMI, which recorded at an index value of 24.2 with a fall of 5.8 index points from the previous month, reaching the lowest level since the beginning of the survey. This decline in index was mainly driven by New Orders, Production and Employment sub-indices which declined at record rates.
With the continuation of island wide curfew to limit the spread of the virus, almost all the manufacturing establishments either remained closed during the month of April 2020 or operated at a fraction of its usual capacity.
Accordingly, New Orders, Production, Employment and Stock of Purchases sub-indices remained far below the neutral threshold. Many respondents in the textile and wearing apparel sector highlighted that they have not received orders for their regular products particularly from US and European buyers due to rapid spread of COVID-19 in those countries.
Moreover, decline of Employment was mainly due to discontinuation of some casual/temporary employees. Stock of purchases also decreased in line with decline of production and new orders.
Suppliers’ Delivery Time lengthened further during the month of April softening the decline in overall index to a considerable extent. Although, lengthening of Suppliers’ Delivery Time typically indicates higher demand for materials with the expanding manufacturing activities, in this instance, the longer lead-times has caused by the delays in shipments and local logistics, linked to the COIVID-19 pandemic.
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