The Manufacturing Sector PMI recorded an index value of 57.1 in February which is an increase of 0.9 index points compared to January 2017. This indicates that the manufacturing activities continued to expand in February 2017, largely attributable to increasing orders for the upcoming New Year season visible in New Orders sub-index. The Stock of Purchases subindex decreased in February as a result of the usage of stocks accumulated in January and the delays in delivering materials which is reflected by lengthening of Suppliers’ Delivery Time. The Employment sub-index also increased while Production sub-index remain unchanged. The less number of working days in February was highlighted as a constraint for increasing the production to meet the increase in new orders. Overall data points to an expansion where all the sub-indices are above the neutral 50.0 threshold. The expectations for activities indicated an improvement for the next three months.

Sri Lanka’s external sector recorded a modest performance during November 2016. The trade deficit widened as a result of higher import expenditure amidst a decline in export earnings, albeit marginally, during the month of November 2016. The significant increase in import expenditure in November 2016 was mainly due to the increase in expenditure on intermediate and investment goods. Earnings from tourism continued to record a healthy growth while workers’ remittances declined marginally during the month. The government securities market witnessed a net outflow in the month of November, while net inflows to the Colombo Stock Exchange (CSE) and long term loan proceeds to the government supported the Balance of Payments (BOP) in November 2016.

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