Purchasing Managers’ Indices indicate expansions in Manufacturing and Services activities in March 2024.

Sri Lanka Purchasing Managers’ Index for Manufacturing (PMI – Manufacturing) recorded an index value of 62.5 in March 2024, indicating an expansion in manufacturing activities. This marks the highest PMI-Manufacturing that was recorded in three years. All the sub-indices expanded on a month-on-month basis contributing to this increase, mainly driven by the seasonal demand.

The increase in New Orders and Production was mainly attributable to the manufacture of food & beverages and textiles & apparel sectors. Most of the manufacturers, especially in food & beverage sector, were optimistic about the upcoming festive season. Moreover, Employment and Stock of Purchases increased during the month in line with the New Orders and Production. Further, a decline in price levels was also evident. Meanwhile, Suppliers' Delivery Time remained lengthened, yet at a slower rate in March.

Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100) decelerated sharply to 0.9% in March 2024 from 5.9% in February 2024. This deceleration in the headline inflation is broadly in line with the projections of the Central Bank of Sri Lanka (CBSL).

Non-Food Category recorded a deflation (Y-o-Y) of 0.5% in March 2024 compared to the inflation of 7.0% observed in February 2024. Nevertheless, food inflation (Y-o-Y) accelerated to 3.8% in March 2024 from 3.5% in February 2024. Monthly change of CCPI recorded -1.94% in March 2024 due to the price decreases of 0.66% observed in the items of Food category and decreases of 1.28% observed in Non-Food category items. Meanwhile, core inflation (Y-o-Y), which reflects the underlying inflation trends in the economy, accelerated to 3.1% in March 2024 from 2.8% in February 2024.