Sri Lanka's Services and Manufacturing PMIs Signal Continued Economic Resilience Amid Fluctuations

Updated: March 16, 2026 22:55

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Sri Lanka's services PMI dipped to 54.4 in February from 64.5 in January, while manufacturing PMI edged up to 56.8 from 56.1, both remaining above the 50 expansion threshold. These Purchasing Managers' Index (PMI) readings highlight sustained growth in key sectors, offering insights into the island nation's post-crisis economic recovery and business confidence.

In a mixed yet positive update for Sri Lanka's economy, the latest PMI data reveals ongoing expansion in services and manufacturing despite a notable slowdown in services activity. Released by Sri Lanka Purchasing Managers' Index, the February figures underscore resilience as the country navigates global headwinds and domestic reforms.

Services Sector Moderates but Stays in Growth Territory

Sri Lanka services sector PMI fell sharply to 54.4 index points in February 2025, down from a robust 64.5 in January. This slowdown reflects softer demand and cautious hiring amid inflationary pressures and supply chain hiccups. However, readings above 50 confirm expansion, driven by tourism recovery and digital services uptake. Businesses reported moderate new orders and output growth, signaling steady but tempered optimism in this vital GDP contributor, which accounts for over 50% of the economy.

Manufacturing Sector Gains Slight Momentum

Contrastingly, Sri Lanka manufacturing PMI climbed to 56.8 in February from 56.1 the prior month, indicating firmer business conditions. Key drivers included rising export orders, particularly in apparel and food processing, alongside improved supplier deliveries. Employment edged higher, though input costs remained elevated due to energy prices and imported raw materials. This uptick bolsters manufacturing's role in export-led growth, aligning with government incentives for industrial revival.

Key highlights

Services PMI: 54.4 (Feb) vs 64.5 (Jan) - expansion persists despite dip
Manufacturing PMI: 56.8 (Feb) vs 56.1 (Jan) - modest improvement signals stability
Both sectors above 50: Positive outlook for Sri Lanka economic recovery
Implications: Boosts investor confidence in post-crisis reforms and tourism rebound

These PMI trends position Sri Lanka as an emerging market contender in South Asia, with services PMI and manufacturing PMI data pointing to sustainable growth amid IMF-backed stabilization efforts.

Sources: Sri Lanka Purchasing Managers' Index; Trading Economics

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Sri Lanka's Services and Manufacturing PMIs Signal Continued Economic Resilience Amid Fluctuations

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