Monday, 18 February 2019 05:51

SL Manufacturing, services and Business sectors gain momentum

Sri Lanka Manufacturing activities expanded at a higher rate with the acceleration of service actor growth amidst slight improvement in countrywide business climate as a result of consolidation of the economy gradually along with the political stability last month, economic analysts said.

This was mainly driven by the expansion in employment and production, especially in manufacturing of textiles, wearing apparels, leather and related activities, Central Bank announced this week.

A significant improvement in employment was experienced with the recruitment of new employees to fill the vacancies in January this year compared to statistics in December 2018.

Accordingly, the production also increased with the enhanced level of employment as well as the orders carried forward in January 2019 from the previous month, CB said.

Services sector growth accelerated in January 2019, underpinned by a strong upturn in Employment, New Businesses and Expectations for Activities.

Employment sub index reached a seven-month high in January 2019 due to recruitments for filling vacant positions, which were delayed in December 2018.

Respondents in education; and postal and courier activities sub sectors cited that their new businesses were expanded in January 2019 due to intake of new batches and increase in gift deliveries for the new year.

Expectations for Activities also expanded as service providers expect that the new budget would provide some stimulus to the local economy.

However, neutral expansion in Business Activity at the beginning of the year could be due to seasonality, as the activity level in January 2019 is compared with a strong activity level in December 2018, which was a festive season and peak season for tourism, Central Bank said.

Prices Charged in the Services sector increased at a slower rate in January 2019 due to stabilisation of the local currency value, while the expected Labour Cost in the services sector increased at a higher pace as annual increments are due in April.

(LI NEWS)

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