Despite the Easter Sunday attacks, Sri Lanka’s economic outlook has shown signs of resilience and ability to recover as economic activities were seen returning to normalcy according First Capital First Capital Research.
As per the Purchasing Managers Index, manufacturing activities expanded at a higher rate in June 2019, recording an index value of 53.9 which is an increase of 3.2 index points, compared to May 2019. This expansion in manufacturing PMI is mainly attributable to the recovery in Employment, especially, in manufacturing of food & beverages and textiles & wearing apparels sectors, from the lower employment availability experienced after the Easter Sunday attacks.
Services sector recovered in June 2019 from its lowest level recorded in May 2019, which was mainly caused by the Easter Sunday attack. The recovery in Service activities is mainly attributable to expansion in New Businesses and Business Activity, and Expectations for Activity. Moreover, the industrial production of the manufacturing sector for the 2Q2019 increased by 0.6% to 103.4 relative to 102.8 in 2Q2018.
Following four months of declining fortunes, the LMD-Nielsen Business Confidence Index, shored up by 19 basis points to register 81 in June as the country is gradually emerging from the events that occurred towards the end of April.
However, in July it dropped to 74 and it remains below its 12-month (89) as well as all-time (127) averages as the country has already begun preparing for the presidential election due at the end of the year.
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