Wednesday, 16 September 2020 13:21

Manufacturing and services in the country recover gradually

Sri Lanka’s manufacturing and service activities continued in resilience in last month (August 2020) benefiting from the normalisation of business activities following the near normalcy situation of Covisd-19 pandemic in the country Central Bank announced.

Both new orders and production process remained at expansionary levels in August 2020 while a noticeable negative impact was observed in employment.

Backlogs of work continued to remain in the negative territory indicating that any increase in demand can be met with the existing capacity.

Accordingly, employment declined in August 2020 owing to non extension of work agreements of the contract employees amidst halt in new recruitments.
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Central Bank revealed that the expansion of manufacturing activities was mainly supported by the manufacturing of food & beverages sector.

Some respondents in the manufacturing sector highlighted that they have recruited new employees with the anticipation of upcoming seasonal demand.

The stock of purchases expanded at a slower rate in line with the movements of production and new Orders.

The suppliers’ delivery time continued to lengthen, at a higher pace, due to issues in logistics such as unavailability of direct shipping services, CB observed.

Also, respondents highlighted that the continuation of restrictions imposed on importation of certain categories of goods including machinery parts adversely affected the smooth functioning of manufacturing activities.

The overall expectations for manufacturing activities for the next three months improved, yet some manufacturers are still concerned that the relatively weak demand particularly from external front prevents them from reaching pre-COVID levels.

Services sector continued to expand for the third consecutive month with resilience and efficiency.

(LIN)

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